According to IDC, online ad spending will drop in the first quarter of 2009 for the first time since the dot-com bubble burst in 2001. According to the study, search ads increased in Q4 2008 by 10 percent, but display ads fell 18 percent and classified ads fell 7 percent. IDC also predicts that search ads will see a drop, while display and classified ads drop even further.
"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.
IDC predicts a slow recovery starting in mid-2009.
For advertisers, this may signal a good time to renegotiate rates. For publishers, this may be a good time to consider advertising alternatives, like site sponsorships and paid blogging opportunities.
