Spending on Internet Advertising Starts to Cool

According to PricewaterhouseCoopers, US online-ad spending grew 10.6% in 2008, its slowest rate since 2002. The data suggest the recession is having a significant impact on one of the few drivers of robust growth in media and advertising. The 2008 figure, $23.4 billion, compares with $21.2 billion in 2007, when online-ad revenue surged 26% from the year before. In the fourth quarter of 2008, growth from a year earlier slowed to a relative trickle, 2.6%, to $6.1 billion. In the same period in 2007, online-ad revenue had jumped 24%. The slowdown has sobering implications for the future. Research firm eMarketer halved its 2009 growth forecast based on the new data, estimating that online-ad spending will grow 4.5%, to $24.5 billion, compared with a previous prediction of 8.9%.