News from the IAB (caveat, I am on the Board)…
The Interactive Advertising Bureau (IAB ) and PricewaterhouseCoopers LLP (PwC) today announced that Internet advertising revenues reached almost $5.9 billion for the third quarter of 2008, representing an 11 percent increase over the same period in 2007. While double-digit annual growth continues, the quarter-to-quarter curve remains relatively flat compared to recent past performance….
…The Q3 2008 figures, published in the IAB Internet Advertising Revenue Report, are 2 percent higher than the Q2 2008 results. Set against strong economic headwinds in the U.S. economy, Q3 ’08’s $5.9 billion represents nonetheless the second-highest quarter results ever. For the first nine months of 2008, revenues totaled $17.3 billion, up from $15.2 billion in the same period a year ago and surpassing the record set in the first nine months of 2007 by nearly 14 percent.
The one everyone will be watching, and most expect will be very bad news, is the Q4 spend. It feels like there is a pause in the market as advertisers rethinking how they are spending, and what ROI means in a world of engaged media. Long term, this is a good thing, I think.
That’s not healthy, at least not measured against expectations coming into this year.
Display ad spending will almost certainly drop next year (and may even drop in Q4). Even search spending is flagging.
Yes, online will do better than other media. But certainly doesn’t look like it will grow in the next couple of years.
The rash of public internet companies that are missing their quarters and now giving reduced guidance belies the fact that Q3 has been overshadowed by expectations for Q4 and beyond.
It will be hard for entrepreneurs, and their backers, who rely on display, or video based advertising to reach a sustainable income level near term. But, if past dislocations are any guide, this environment should shortly be an innovators dream.