Internet Ad Spending Down, But It Could Be Worse

Internet advertising revenues checked in at $10.9 billion for the first half of the year, a 5.3 percent decline from the same period in 2008, according to the Interactive Advertising Bureau.

Search and display-related advertising continue to represent the largest percentages of overall interactive advertising spend. Search revenues amounted to more than $5.1 billion for the first six months of 2009, up slightly from that same period in 2008, according to the IAB report

Display-related advertising — which includes display ads, rich media, digital video and sponsorship — totaled nearly $3.8 billion in the first half of this year, showing a relatively modest 1.1 percent decline from the same period in 2008.

Digital video, however, continues to experience double-digit growth with a 38 percent increase from the first half of 2008.

Despite the recession, the IAB chief is still optimistic about the sector.

“We are in one of the most difficult economic slumps in decades. Interactive is one of the advertising sectors that has been least affected,” IAB CEO Randall Rothenberg said in a statement. “In recent years the digital revolution has driven a transformation of how consumers experience advertising and media. As the economy improves, we’re confident that brands will devote an even greater share of their budgets to reaching consumers as they make interactive media a larger part of their lives.”

The IAB report comes on the heels of other data that suggests that advertisers would be wise to continue employing display ads, but should not measure their performance on click-throughs.

Online display ads generate a significant increase in brand site visitation, trademark search and both online and offline sales among those Internet users who were exposed to the online ad campaigns — whether they clicked on the ad or not, according to comScore’s data on 200 clients.

This mirrors other research from comScore published in June that said one in five consumers who view display ads searched on the advertised brand, and one-third visited the advertiser’s site.

Furthermore, that report said online shoppers exposed to display ads spent over 50 percent more time than the average visitors had at these sites and viewed more pages. It also said users spent 10 percent more money online overall, and more on product categories related to the advertised brands.

The findings come at a time when recession-strapped companies are increasingly looking to social media marketing as a more affordable way to promote their products and services compared to standard online display advertising, and as interactive marketing gains at the expense of traditional offline advertising.

Facebook and Twitter see the highest adoption rate in social media marketing, while customer reviews rank number one for increasing sales and customer engagement, according to a recent study by the e-commerce consulting firm e-tailing group.

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