Search adspend to fall in US

13 April 2009

LONDON: Advertising spend on online search in the US will fall by 1.7% this year according to Screen Digest, which also predicts that total internet ad revenues will decline by 4.8% in the country in 2009.

Figures from WARC's latest Consensus Forecast show that US adspend is set to drop off by around 7% this year, while UBS has previously estimated that the web's annual expansion will slow to 1.8%.

Screen Digest, however, predicts that search revenues will post a "mid-single digit" decline in the first half of 2009, and are only like to post marginal growth, of around 0.4%, in 2010.

Vincent Letang, an analyst at the company, argued that the current economic downturn is "probably the first recession" for search, which had not fully established itself during the dotcom crash.

Among the reasons for the predicted slide are the fact that the "three big categories" for the medium – automotive, finance and real estate – are all in a "bad way," with small businesses also suffering.

Screen Digest further forecasts that banner ads will post a drop off of 8.8% this year, with the internet display category down 3.6% overall, following on from a 4% decline in the fourth quarter of last year.

More positively, it reports that video ad sales in America reached $1.2 million (€913m; £821m) in 2008, up 64% on an annual basis, and the company expects this total to continue to expand.

Data sourced from Financial Times; additional content by WARC staff