Online ads experience slower growth in the US

  • 13 October 2008
  • Reading time: 2 min
  • News

The stagnating economy also takes its toll on the Internet, mostly on the level of ads. Consequently, Imran Kahn from JPMorgan has lowered his expectations with respect to the growth of the American online advertising market for 2008 and 2009. While doing this, Kahn does however operate a distinction between “display” ads (banners, etc.) and “performance-based” ads, like the ones that appear with search results.
The display ads will take the most blows: Khan expects that, in 2008, an increase of only 14% is to be expected, where he previously prognosticated an increase of 20%. For 2009, JPMorgan also had to adjust its expectations: an increase of 16% instead of the 17% that were expected earlier.

And even though the number of search ads will keep on growing faster than the ordinary display ads, JPMorgan also has to scale down its numbers: where an increase of 32% was expected in 2008, 27% presently seems to be a more realistic number. A growth of 26% is expected for 2009.

Although JPMorgan expects a worldwide increase of 16% for display ads (36% increase for the search ads), the Dutch department of the Internet Advertising Bureau does not want to rely on predictions. According to Marco Derksen of the IAB, the Dutch have always been in the lead and the largest growth in online media expenditures has already come to pass. The numbers for 2007 are however certain: online media expenditures increased with 29% that year, to reach a total of 729 million euros. That same year, advertising on Internet represented 18.5% of the total advertising market in The Netherlands. During the second quarter of 2008, IAB Netherlands totalized 41.8 million in net media expenditures for online display ads, which represents an increase of 15.7% with respect to the second quarter of 2007.