Online Advertising Down 5.4% in Q3

U.S. online ad spending in the third quarter reached $5.5 billion -- down 5.4% from the same period a year ago, but up 1.7% from the second quarter, according to new figures released by the Interactive Advertising Bureau and PricewaterhouseCoopers.

Spending during the first three quarters of 2009 has been roughly flat as the economic downturn keeps digital ad budgets down after recent years of strong gains. While the fourth quarter is expected to bring a seasonal lift, overall online ad revenue is projected to drop for the first time since 2002.

Market research firm eMarketer is projecting a 2.9% decline to $22.8 billion. But eMarketer and other research firms forecast a gradual recovery through the fourth quarter and into next year, leading to single-digit growth in 2010.

Highlighting a rebound in search advertising, Google reported a strong third quarter, with revenue increasing 7% to $5.95 billion and profit up 27% to $1.64 billion. While revenue continued to fall at Yahoo in the third quarter, the company indicated that it saw signs of a quarterly rise in spending on premium display advertising. Both Google and Yahoo have suggested the worst of the ad slump is behind the online industry.

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The IAB echoed that outlook in announcing third-quarter ad spending totals. "While all segments of the media industry have experienced declines, online advertising remains resilient and is once again showing signs of growth," said David Silverman, a partner at PricewaterhouseCoopers.

 

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