Internet advertising could take years to rebound

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explosion.jpgADOTAS — While some have predicted that the second half of ’09 will see an ad bounce, PriceWaterhouseCoopers sees doom as far as the eye can see.

Digital spending in the US will be 25 percent of the total industry revenue by 2013, compared with 17 percent last year, according to PWC report, Global Entertainment and Media Outlook: 2009-13. But the advertising spending in this country will actually decline during the next five years, according to the report, which forecasts a total of $174 billion in 2013 compared with $189 billion in 2008. According to the NY Times, the last time there were four years in a row of declines took place from 1930 to 1933. But there is currently a string of two in a row, 2007 and 2008, and by all accounts 2009 is shaping up to be the third.

The downturn is accelerating digital consumption and advertising across all media, but that will not be enough to offset the decline in traditional businesses. While online allows for better targeting, it also allows advertisers to be more efficient, spending less, of ad dollars.

“The increase in online elements is not compensating for declines elsewhere,” Phil Stokes, PwC’s UK leader for entertainment and media, told the Financial Times.

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