IDC forecasts first U.S. ad spending contraction since 2001

U.S. online ad spending will shrink year-on-year in the first quarter for the first time since 2001, according to IDC.

More bad news for advertising-supported Internet and media companies like Google, Yahoo, Facebook and MySpace: IDC is predicting that online ad spending in the U.S. will shrink year-on-year in the first quarter for the first time since the dot-com bubble burst in 2001.

In preliminary results, IDC said Wednesday that U.S. online ad spending was essentially flat in the fourth quarter of 2008, as search ads increased 10 percent while display and classified ads fell 7 percent and 18 percent, respectively, compared with the same quarter in 2007.

"All of this does not bode well for the current first quarter," IDC said in a statement. In fact, U.S. online ad spending may shrink in the second quarter of 2009 as well.

IDC is calling its forecast for 10 percent growth in U.S. online ad spending in 2009 "too optimistic" and suggests it will revise it down, given the latest data it has collected, when it issues its next forecast in late March.

While in the fourth quarter of 2008 the increase in search ads offset the bad performance of display ads and classifieds, the first quarter will likely see a slowdown in search ads, while display ads and classifieds plummet further, IDC said.

"All in all, we believe U.S. Internet advertising revenue could contract by as much as 5 percent in 1Q09 [compared to 2008's first quarter]. And things may get worse in the second quarter," IDC said.

Fortunately, there is light at the end of the tunnel, as IDC predicts that things will start to turn around in mid-2009 and begin a slow recovery from there.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags IDCeconomic downturn

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Juan Carlos Perez

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?