• by Mark Walsh  @markfwal, October 1, 2008

The falloff in financial services spending online this year is hardly surprising, given the financial crisis that has already felled several high-profile banks and forced others into hasty mergers.

 

Among other key online ad categories that could be hard-hit by the economy's slide into recession are endemic Web advertisers such as Yahoo, InterActiveCorp, Monster and comparison-shopping site NextTag.

During the first half of 2008, online ad spending by Web media companies dropped only 1% compared to 27% for financial services advertisers, according to Nielsen Online.

More recently, however, Web media advertising has shown a bigger decline. In August, spending in the category dropped to $102 million, from $172 million in May and $151 million in March. It was also well below the $159 million spent in the year-earlier period.

After ranking as the top spending industry in May, Web media slipped to third in August behind financial services ($166 million) and retail goods and services ($109 million). Among the top 10 ad categories, none showed as big a dropoff compared to three months ago as Web media.

Nielsen doesn't break out top individual advertisers anymore, making it difficult to monitor spending reductions by specific companies. Earlier this year, however, Nextag--which also generates online mortgage leads--was already cutting ad spending in the wake of the real estate collapse.

Forecasts for U.S. online advertising overall this year and 2009 have been reduced. Emarketer has lowered its prediction for online ad growth in 2008, from 27% to 17.5% to almost $25 billion. Growth is expected to slow further to 14.5% next year. Still, compared to the anemic 1.9% increase predicted for overall advertising, the Web remains a bright spot.

But don't be surprised if eMarketer and other research firms revise their predictions downward again in the coming months as the full impact of the financial upheaval on the economy becomes more clear.