Online ad revenues hit the brakes

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Online ad revenues hit the brakes

John Cook on Thursday, November 20, 2008, 12:27pm PST

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Advertising | Media | Networking | Web

Online advertising revenue grew 11 percent to $5.9 billion in the third quarter over the same period last year, but the emerging industry appears to have hit a speed bump in recent months. The Interactive Advertising Bureau said that growth in ad revenues remains relatively flat on a quarter-to-quarter basis, rising just two percent over the second quarter.

That's tough news for a host of large and small companies in the Seattle area, ranging from titans such as Microsoft to startups such as BuddyTV that derive nearly all of their revenue from advertising sales.

We've seen a number of Seattle area companies that rely on advertising -- from AdReady to Zillow.com --- cut back on staffing in recent weeks.

But on the bright side, at least these companies aren't involved in old media.

"A weakening economy will continue to be a challenge to all forms of advertising-supported media," said David Silverman, a partner at PricewaterhouseCoopers, whose firm assisted in the study with the IAB. " However, the Internet should be better poised to withstand the storm given its ability to combine performance-based advertising along with broad-based branding.”

About John Cook

John Cook is co-founder and executive editor of TechFlash. He has been covering the technology beat for nearly a decade, writing about startups, entrepreneurs and venture capital, most recently serving as a reporter/blogger at the Seattle Post-Intelligencer.

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