According to IDC, online advertising is expected to decline in the first quarter of 2009. This is the first decline since the dot com bubble burst. Preliminary results from 4Q08 have showed steady overall levels of online advertising; with an increase in search ads but a decrease in display and classified ads. Search ads are expected to decrease in 1Q and display and classifieds to plummet even further.
This is predicted to continue into 2Q, but is expected to start turning around mid-2009. However, I don't know on what basis IDC feels that the current trend will turn in mid-2009, there really is not evidence to support that claim. In order to keep online advertising lucrative, search companies need to find ways to incentivize advertisers to keep advertising. As advertising is their bread and butter, this decline will have significant ramifications going forward. Display ad prices may need to decrease in order to keep up their popularity.
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