Danger Signals for Internet Advertising?

Michael Tchong’s Iconocast has an interesting piece in its latest newsletter
that raises some questions about whether the meteoric growth of Web
advertising will continue.

“Like an infant taking its first steps, Internet advertising gets up, wobbles
a bit, steadies itself and then falls down again. Could this simply be a
matter of growing up or are
these real danger signals?,” the article asks.

A closer look at IAB ad expenditure data released at @d:tech last week shows
that ad spending rose 20% in the second quarter compared to the first quarter,
a much
smaller growth rate than 1997’s 66% and 1996’s 75%, the article says.

A new Market Facts study reports that the percentage of users who never look
at banners rose from 39% to 49% in the past year, Iconocast said. The Ad Age-
sponsored study was based on a random phone sample of 2,000 U.S. adults
contacted during the first week of October.

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