Data Reveals Online Display Is Bucking Ad Downturn, Rises 8% In First Quarter

While the overall online advertising marketplace declined an estimated 5% during the first quarter of 2009, according to official estimates released recently by the Interactive Advertising Bureau and PricewaterhouseCoopers, new data being released this morning suggests a portion of the online display advertising marketplace may be bucking the downward trend. The data, which comes from ad tracking firm TNS Media Intelligence, shows online display ad spending rising 8.2% during the first quarter of 2009. That compares with a decline of 14.2% for total ad spending in the media tracked by TNS MI, and represents the only major medium to show any growth during the quarter.

The TNS MI estimates come a day after research rival Nielsen Co. released data indicating that Internet advertising fell 3.4% during the first quarter, but the difference may be due to varying methods used by the research organizations.

Nielsen says its Internet ad expenditure data accounts for, "CPM-based, image-based advertising," and do not account for, "paid search advertising, text only, paid fee services, performance-based campaigns, sponsorships, barters, in-stream ("pre-rolls") players, messenger applications, partnership advertising, promotions and email campaigns, or house advertising activity."



Jon Swallen, senior vice president-research at TNS MI, says its online display ad estimates are based on a "rate card methodology" showing prices to be "virtually flat year-over-year," but he attributed the higher overall online display ad expenditures to two factors:

"(A) increased volume of Web site traffic which leads to more impressions per ad, which leads to a larger dollar value for that ad; and, (B) an uptick in the number of ads per Web site that our monitoring uncovered"

In the relatively brief history of online ad volume tracking, estimates have varied widely, and organizations have recalibrated methods because the nature of the medium - and what constitutes advertising within it - has also evolved quickly. But TNS MI's Swallen says the base being tracked by TNS MI has remained consistent, and representative over time.

And while it differs from the official industry estimates reported by the IAB and PwC, there may be some correlation there too.

While the IAB/PwC have not released online display related details for the first quarter of 2009 yet, their fourth quarter 2008 data showed a similar patterns with overall Internet ad spending trending downward, but display actually rising. That insight was disclosed by comScore Chairman and Co-Founder Gian Fulgoni during a presentation May 8 at MediaPost's Search Insider Summit on Captiva Island, FL, in which he cited a comScore analysis of the IAB/PwC data that found an 8% increase in online banner advertising.

Other research tracking the attitudes of top advertisers and agency executives toward overall and online ad spending also indicates that they remain relatively bullish on the Internet. That data, from Advertiser Perceptions Inc., measures the relative optimism for ad spending across the major media. The most recent bi-monthly poll, released in May, shows that slightly more than half (51%) of 1,599 advertiser and agency executives planned to boost their online advertising budgets over the next six months, though that figure is trending down. It was from 68% two months ago, and 72% a year ago.

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