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Online Ad Spend Up Year Over Year, Despite Stumbles

A whole passel of numbers have come out the past week or so, and while none of them quite jibe with each other, they all paint a pretty consistent picture. While online ad spend was up for Q1 2008 versus Q1 2007, ad spending compared to Q4 2007 was actually flat. A look at the finer details of each of the reports:

  • TNS Media Intelligence put out numbers last Wednesday, focusing only on display ads online, found year over year growth of only 8.9 percent, compared to 15.9 percent growth in Q1 2007. From the ClickZ article:
    Jon Swallen, SVP of research at TNS Media Intelligence, said certain verticals notably curtailed their display ad spending. Telecom advertising, usually a heavy user of Internet display ads, was "very weak" in first quarter, he said. So was retail, particularly local advertisers that divide their online budgets between display and search.

    "The difficulties the retail market is going through, with all the cutbacks in consumer spending and all the uncertainty about the general economy resulted in cutting back in many sectors," said Swallen.

  • Nielsen Monitor-Plus announced numbers yesterday, showing overall online ad growth (including search and display) up by 15 percent year over year, with several verticals showing tremendous growth:
  • Among verticals, the researchers found that hardware and electronics advertisers both saw a 65 percent increase in display impressions, while automotive and consumer goods companies also did well, increasing 45 percent and 42 percent respectively.
  • Finally, today the Internet Advertising Bureau released the most optimistic numbers, showing over $5.8 billion spent in online from January to March of 2008, an 18.2 percent increase compared to the results of the same time period in 2007. However, the report also noted that compared to Q4 2007 results, there was a slip of 1.7 percent in online ad spend. This may be due, however, to the traditional post-holiday slump:
    The decline was expected, said David Silverman, partner, Assurance, PricewaterhouseCoopers, which conducts the study on behalf of the IAB. "The cyclical fourth quarter to first quarter drop in traditional media advertising spend, combined with an overall economic slowdown, resulted in a not so unexpected first quarter slowdown in the growth of online advertising," Silverman said in a prepared statement.
So broadly, we can see the online ad market at a whole is continuing to grow, particularly in relation to the over all advertising spend, which saw growth rates of only 0.5 or 0.6 percent, depending on where you get your numbers from (TNS has 0.6, while Nielsen pegs it at 0.5). And even the Q4 to Q1 slump is to be expected. But as the industry as a whole is increasingly skittish about the effects of recession on their always vulnerable advertising budgets, even small tremors can reverberate throughout the ad world.
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