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Are online ad revenues falling ?

Digital media advertisement revenues once considered the fastest growing segment has hit a roadblock according to Newspapers Association of America, rising by just 1% in the first two quarters of the year and declining to negative growth thereafter. Total online revenues of Google, Facebook and other news aggregators also seem to be slowing, growing by just 14% on a year on year basis. The figures weaned out of data from PWC and PEW reports show that while print media advertisement revenues are dropping sharply, digital media growth have slowed down.

After slipping precipitously in all of 2008 and 2009 due to the global recession digital media revenues for both newspapers and online aggregators had picked up in 2010 but are again seeming to slow down. For American newspapers the digital advertisement revenue that grew by 11 % from around $2.74 billion in 2009 to $3.04 billion in 2010 slowed down to less than 7 % at $3.25 billion According to current trends the figures may show a marginal decline this year. Online advertisement for news aggregators, social media and search engines also display a similar trend of slowdown after rising by nearly 15 % from  $22.66 billion in 2009 to $26.04 billion in 2010 and another 21% to $31.72 billion in 2011 the revenue rise in 2012 is estimated to grow by just 14% in 2012 reports interactive advertisement bureau.

While Unilever increased its ad spend by 48.6% mort other big advertisers lost ground and  reduced their outlays from the quarter a year earlier.

FMCG giant and Unilever’s closest competitor  Procter & Gamble was down 13.2%; Telephone major AT&T reduced ad spend by 21%; and General Motors, cut costs 30.1% during the first quarter.  Many companies deferred advertisement saving  for the US Presidential election and the London Olympics and analysts are hoping that the revenues will pick up by the year end though not at  the same pace of last year keeping in line with the slowdown in overall advertising revenues during the first half of 2012. “Ad spending growth sputtered during the second quarter and was unable to sustain its early year momentum,” said Jon Swallen, chief research officer at Kantar Media North America, in a statement. “The advertising market is mirroring the tepid, slow growth performance of the general economy.” This may be the first indication of an overall slowdown in the markets which could be a long term trends as high debts keep economies on a spending leash.


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