• by Joe Mandese  @mp_joemandese, July 13, 2009

Online search will be the only major medium to expand its advertising market during 2009, according to a new forecast released this morning by Interpublic. The forecast, the first to utilize Interpublic's new methodology, which calculates actual advertising revenues from media suppliers vs. estimates of advertising spending from media buyers, predicts online search ad spending will expand 3.6% during 2009.

Total direct response-based online advertising, a new category devised by Interpublic's Magna unit to including search, "lead generation" and online yellow pages, will grow 2.9% to $13.9 billion in 2009, and will grow at a compound average annual growth rate of 10.2% through 2014.

National digital/online media, a new Interpublic category that includes rich media, online video, classifieds, email, display and mobile, will decline 11.1% to $5.5 billion this year, according to Interpublic. Over the next five years, the agency projects the national category will rise at an average compound rate of 4.7%.

Local digital/online, a new Interpublic category that includes online revenues from local TV stations, local radio stations and local newspapers, will decline 5.9% this year to $3.5 billion, but will grow at a compound average annual rate of 6.4% over the next five years.

In aggregate, overall online ad spending will decline 2.2% to $23.0 billion this year, but will grow at a compound average growth rate of 8.4% over the next five years.

Magna Global Director of Forecasting Brian Wieser attributed the overall slowdown in the online advertising marketplace to a variety of cyclical factors, such as the economy, as well as "secular" ones that are changing the underlying structure of the online advertising marketplace, such as the expansion of online advertising inventory, the rise of advertising networks, and the shift toward "audience-based" media buys.

He said those trends aren't necessarily "negative" for the online industry, and said that in the long run, would make it "more efficient" and more valuable to advertisers, even though average prices are falling, and the online ad industry faces a period of price deflation.

Even so, the online industry looks relatively robust compared with the projections Interpublic released today for other media and the overall advertising marketplace. The agency projects ad spending on television will decline 14.4%, while magazines will drop 18.3%, radio will fall 21.0%, outdoor will drop 12.9%, and newspapers (including online) will plummet 24.8% this year.

The overall U.S. advertising marketplace, as defined under Interpublic's new methodology, will decline 14.5% to $161.4 billion in 2009, and will expand just 0.9% on average annual basis through 2014.

Wieser said the U.S. ad economy declined 18% during the first and second quarters of 2009, but expects conditions to improve during the second half of this year, leading to an aggregate decline of 14.5%.

While the ad economy will begin to turnaround next year, Wieser projected it would remain tepid for the foreseeable future.

"The indicators are not very strong," he said.

His complete forecast can be found here.