US Web ads decline 5% in first half

Despite slump in most advertising spending, recession fails to affect online digital video ads

For the second quarter in a row, the recession continues to take its toll on online advertising. According to the latest data from the Interactive Advertising Bureau (IAB), advertising spending in the United States amounted to $10.9 billion, a 5.3% dip compared to the first half of last year. That's about $610 million less being spent on ads.

Nearly half of the total was spent on search advertising, which accumulated $5.1 billion in revenue. IAB says that means search advertising in the U.S. actually saw a slight increase when compared with the first half of 2008.

Display ads, rich media, digital video ads, and other related forms of advertising fell 1.1% from last year to this year's $3.8 billion. Remarkably, digital video ads appear to be doing very well on their own, as the $477 million sector has seen a 38% rise from last year.

"We are in one of the most difficult economic slumps in decades," concludes Randall Rothenberg, president and chief executive of the IAB. "Interactive is one of the advertising sectors that has been least affected."

Two consecutive quarters of decline in Web advertising sales has not been seen since the beginning of the decade, when the burst of the dot-com bubble resulted in eight consecutive quarters of dropping ad sales.

No one is expecting the market to suffer so badly this time around, however.

Though recession is hurting advertising of all kinds, the online variety appears the least affected. The whole ad industry witnessed a 15.4% drop in the last two quarters, a significantly higher decline compared with online ad spending. Newspaper advertising suffered the most (likely at the hands of online media), seeing a 29% diminution in the second quarter of 2009.

While analysts don't expect newspapers to draw back advertisers as the recession ends, online businesses shouldn't have too much problem doing so.