Nielsen: Growth in Online Display Market Stalled

finance guyAdvertisers shilling financial services spent 27% less on display ads in the first half of 2008 than they did in 2007, and their pullback helped drag down the entire "image-based" online ad market by 6%.

That's according to the latest stats released from Nielsen Online. Public services advertisers also cut back sharply--slashing budgets by nearly 40%, although they have historically been a much smaller segment in terms of overall spend. Meanwhile, telecom and retail brands decreased their display ad buys by at least 5%.

But there are signs that other sectors have begun to pick up some of the newly available inventory.

For example, automotive companies spent more than $301 million on display ads in the first half, up 45% year-over-year. Consumer goods brands pumped over $292 million into the market--up 32%--and entertainment brands upped their spending by 47%. Hardware and electronics advertisers also saturated the display market in the first half, spending more than $146 million for a 19% increase year-over-year.

"The good news is that we saw large gains from brand advertisers including Anheuser-Busch, Unilever, Toyota and General Motors, among others, which bodes well for the future," said Jon Gibs, Nielsen Online's vice president, media analytics.

Gibs said that the display cutbacks also have the potential to be offset by increased spending in other online ad channels like search and video. Spending on rich media ads, for example, was up 60% year-over-year. "The early 2008 decline in image-based online ad spend reflects the macro movements in the overall economy, particularly within the financial services industry," he said. "(But) the shift we're seeing from display ads to rich media and text formats opens up even more creative possibilities for advertisers and should drive continued growth in the online advertising sector."

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