US web ad sales slip again

Internet advertising in the United States slipped 5 per cent in the second quarter as the recession extended the first slump in online marketing since 2002.

The $5.4 billion (£3.4 billion) spent on internet ads during the three months ending in June compared with $5.7 billion (£3.58 billion) at the same time last year, according to data released yesterday by the Interactive Advertising Bureau and PricewaterhouseCoopers.

It marked the second consecutive quarterly decline in internet advertising, the first time that has happened since the aftermath of the dot-com bust at the beginning of the decade. The fallout from that implosion resulted in eight consecutive quarters of falling online ad sales.

For the first half of this year, internet advertising totalled $10.9 billion (£6.86 billion), also down 5 per cent from the same period of 2008. Nearly half that money has been spent on search advertising, helping to further enrich Google, which controls nearly two-thirds of the US search market.

Google's ad sales during the first half of the year edged up 4 per cent. Those gains include ad revenue from outside the US.

Unlike the distress and doubt that gripped internet companies during the web's last advertising downturn, the mood is more sanguine this time.

That is largely because this decline is perceived to be a temporary problem driven by the economic upheaval that has waylaid traditionally big ad spenders in the financial services, real estate and retailing sectors. With unemployment approaching 10 per cent, online job listings have also plummeted.

Internet ad specialists are confident revenue growth will pick up as the US economy recovers and marketers increase their efforts to connect with consumers who are increasingly going to the web for information and entertainment.