Online advertising is not growing, and it has been declining since Q3 2007. TechCrunch’s Erick Schonfeld has the graphical data to prove that the combined ad revenues of Google, Microsoft, Yahoo and AOL account only for 0.6 percent growth from Q2 2008 to Q3 2008. That was coming from a declining trend in ad revenues which started from the Q3 to Q4 of 2007 where the ad revenue rate was at its highest at 12.7 percent.
The declining trend stretched further from Q4 2007 to Q1 2008 where the ad revenue growth was only 2.8%, Q1 to Q2 2008 got a 1.1% growth and the latest from Q2 to Q3 with only .6% growth rate.
Schonfeld’s data consisted of total ad revenues of both Google and Yahoo including network revenue paid to their affiliates, Microsoft’s online revenues and AOL’s advertising revenue. Interestingly, Yahoo, Microsoft and AOL’s revenues consistently declined from 2007 to the Q3 of 2008, while Google’s ad revenues has been consistently increasing quarter by quarter but was not enough to pull the over all growth rate.
It may all seem bad for the online advertising industry but looking at the trend relative to other industries, one positive note would be the fact that it still manages to hold on and has not reached the negative threshold. But it’s still more than a month left before the year comes to a close, and growth rate from Q3 to Q4 comes in. It would be interesting to find out if the total advertising revenue can maintain that minimal growth rate. Or whether it could be the start of something better for the online ad industry in the coming months.
So it’s not actually declining, just the rate at which it’s growing is declining.
I wouldn’t really say the “online ad industry is not looking good”.
I think it’s just that there are less and less people to join the trend thats all.
Once people stop using online ads, thats when we can say it’s not looking good.
@ Hull Web Design – I would have to agree. Given the present economy, slowing growth is to be expected. Negative growth would be cause for concern. I think it is natural for the growth to slow as time goes on anyway. I’m not really sure this is a major cause for concern.
I think Q4 numbers will tell more of the story.
I think this is probably just a natural progression . Beyond the obvious economic issues that are affecting ALL marketing budgets, a lot of industries are beginning to understand that there are other ways to reach their audience.
We’ve noticed an increase in organic SEO interest much greater than we’ve seen previously. I’m certain many companies are hiring in-house staff to perform some of these services also.
Still, it’s an interesting read and worthy of keeping an eye on.
I still believe that this industry still have a bright future in the long run. I agree it is temporary declined.