U.S. Online Ad Spend Decline 5 Percent in Q1-2009:IAB-PwC

The Interactive Advertising Bureau (IAB) and PricewaterhouseCooper (PwC) released data reporting that Internet advertising spend declined to $5.5 billion, a 5 percent (QoQ) decline for the first quarter of 2009.

The numbers are only for U.S market and as such do not denote the internet advertising spend in other countries. As such emerging markets are immune to certain degree with the turmoil played out  in U.S markets.

The trend was already set up by the results declared by Google and other online behemoths which registered a decline in quarterly revenues QoQ.The fall may further look exacerbated as it is 9.8 percent decline YoY.

One thing which should be noted is that online ad spending in U.S is in sync with the economic growth in U.S. As the graph of Online Ad spend shows that the spends topped at last quarter of 2007 and has shown similar patterns of recovery and another decline in tandem with economic barometers. If it is further extrapolated then online ad spending would definitely see upswing in the June quarter as economic activity spikes up.

WATBlog earlier reported that current online spending for FY2008 was at $23 billion which would be registering an average growth of 17% for the next 5 years touching $55 Billion. The numbers should not come as a surprise as the targeted growth for online ad segment was just 11% for 2009 which is very much possible with the signs of revival in U.S economy.

This also goes onto show that online ad spending is not immune to economic activities due to large spending by big corporations where ad spending decisions are taken by the demand and economic activity in the economy.

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