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Search ad spending predicted to fall

10 апреля 2009

Spending on US search advertising will decline this year, the first time the market – dominated by Google – has faced a serious downturn, analysts predict.

Screen Digest, a London-based research group, forecasts that the US search market will fall 1.7 per cent in 2009, with “mid-single digit” percentage falls in the first half of the year.

Advertising against search terms has been the most resilient part of the media market. In spite of forecasts that global advertising spending will decline as much as 5.8 per cent this year, previous forecasts have maintained that search would continue to grow.

Search marketing can be bought at shorter notice than most ads, and it is easier to see the results of a search campaign.

“In the previous dotcom crash, search was really small,” said Vincent Letang, analyst at Screen Digest. “For the search segment, it’s probably the first recession.”

Screen Digest’s warning is part of a wider report, which forecasts that US online advertising will fall 4.8 per cent in 2009 compared with 10.6 per cent growth last year.

Growth in online ad spending started to slow in the fourth quarter of last year, according to the Internet Advertising Bureau’s latest figures, up 2.6 per cent on the previous year. Between 2006 and 2007 it grew by 25 per cent.

Search is the largest element in online advertising, and Google holds around 60 per cent of the US search market. Google’s revenue growth slowed to 13 per cent in the fourth quarter, from 31 per cent in the first quarter of 2008.

“Economic conditions have worsened and the three big categories for search – automotive, real estate and finance – are in such a bad way,” said Mr Letang. “That is why we believe there is a chance the situation will worsen in the first two quarters for search. Over the full year, it may be down.”

Even with the decline, search is still outperforming most other developed advertising markets. But growth is unlikely to recover until mid-2010, Mr Letang said.

Small businesses are big customers of search engine advertising, another contributory factor, he added.

In other online media, banner advertising will fall 8.8 per cent, but online video will continue its double-digit growth, Screen Digest predicts.

Enders Analysis, another research firm, last week forecast that the UK online advertising market would be flat this year, with growth of 4.5 per cent in search.
The Institute of Practitioners in Advertising’s bellwether report earlier this week found a quarter of marketers were cutting online advertising budgets.

Источник: Financial Times

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