Digital Ad Sales Fall Flat

By Steve Smith

Magazine companies that were looking to digital properties for that rare area of growth in the coming year may have to look again. According to the new Interactive Advertising Bureau report for Q3, digital ad sales are relatively flat compared to the previous quarter. The $5.9 billion in online spend did represent am 11% increase over same quarter 2007, but quarter-to-quarter growth stagnated at 2%. Randall Rothenberg, president and CEO of the IAB blamed the recession but indicated that tough economic times may also move marketers toward the measurable platforms online.

Despite the leveling off of Internet sales, the first three quarters of 2008 saw revenues reach a record $17.3 billion, up 14% from the same nine-month period last year ($15.2 billion).

The new IAB numbers seem to reinforce heavily revised estimates for 2009 online ad spending from analysts like Borrell and Citi Internet. Many analysts are now projecting 5% or lower digital ad growth next year. With a greater emphasis on measurability and ROI from budget-strapped marketers, the fate of display advertising and brand campaigns is of particular concern for major media sites as everyone waits to see how buyers realign their Q1 2009 budgets.