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Solid Proof that the Online Ad Industry is not Looking Good

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Solid Proof that the Online Ad Industry is not Looking Good

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.

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Arnold Zafra

Arnold Zafra writes daily on the announcements by Google, Ask.com, Yahoo & MSN along with how these announcements effect web ... [Read full bio]

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