U.S. online ad spending dropped for the third straight quarter during the third quarter of 2009 by 4% to $6.4 billion compared to a year ago, according to new data from market research firm IDC.
Globally, online ad dollars slipped 1% to $14.7 billion over the period.
While still in the red, those figures represent an improvement over the prior quarter declines of 7% and 5.6% in the
U.S. and worldwide, respectively, and signal that Internet advertising may have begun to recover, said IDC. The firm expects the U.S. market to dip again in the fourth quarter, but only by about 1%,
before seeing a return to actual growth in the first and second quarters of 2010.
That forecast is in line with others that predict a rebound in 2010 after the first down year for online
advertising since 2002. Last month, eMarketer revised its online ad spending forecast for 2009 downward, projecting a 2.9% decline to $22.8 billion. It expects moderate growth to return next year and
in 2011, with spending to increase 5.6% and 6.6%, respectively.
In looking in particular at search advertising, IDC found that search traffic share gains by Microsoft's Bing since its May launch
have translated into ad revenue share increases as well, from 6.1% to 6.8% over the last quarter. But the uptick came mainly at the expense of Yahoo Search rather than Google. Yahoo struck a deal
earlier this year with Microsoft for Bing to power search on the Web portal.
While Microsoft's search revenue has grown 5% to 11 million this year, IDC pointed out that the company currently
spends about twice as much each quarter on the extensive Bing marketing effort. "It remains to be seen if Bing can hold on to this market share gain after the campaign ends, or if this is merely a
flash in the pan," noted IDC analyst Karsten Wiede in the report.
It also underscored how far AOL has fallen in competition with the other Web giants, with its share of the overall online ad
markets cut nearly in half to 4.4% in the third quarter from 8.2% at the beginning of 2005. Time Warner reported last week that revenue was down 23% at AOL during the quarter because of declining ad
sales and fleeing subscribers. The media giant plans to spin off the struggling online unit as a separate company by year's end.