Search Engine Optimization News Blog

The current economy condition is affecting all business, both online business and offline businesses. All businesses are trying to cutback on their expenditure and one of the areas that is getting a major hit is the advertising budget. There was a growing trend in the advertising industry that more and more companies were opting to spend a greater portion of their money on online advertising because of the revenue generation potential it had. However, the difficult economic times is slowing down online advertising. Experts predict that the coming year, 2009 may not be a good year for online advertising industry as well. It is not only 2009, but this year too online advertising companies have to bear the brunt of the economic crunch.

According to the reports of Interactive Advertising Bureau ad PricewaterhouseCoopers the ad revenue of the online advertising industry increased by just 2% in the third quarter reaching $5.9 billion. The overall online ad sales will barely touch 10% this year at this rate. Last year the online ad industry showed a massive growth rate of 23%.

According to Citigroup the overall growth rate for 2008, will comedown to 11.4% from the already projected 16.1%. The growth rate will comedown further to 5.8% for 2009. Online ad industry will not have a double-digit growth rate, which was the phenomenon in the online industry in the recent past. It might take sometime before the ad industry can recuperate and bounce back to double-digit growth rate. It will reach an all time low since 2003.

According to the Citigroup Internet analysts, most companies are still hesitant to set their advertising budget for 2009. They are trying to play cautious so that they will not burn their fingers. One of the good news is that Google advertising may continue to retain their advertising figures when compared to the display advertising. Display ad revenues will drop by 8.5% as per speculations. On the other hand, the search ad segment is likely to improve by 13.7%. So companies are likely to spend most of their advertising budget in search ad industry. This is again a clear indication of increased online competition. SEO companies are likely to thrive in spite of the economy slowdown. Statistics show that when the growth rates are compared with the conventional advertising media, online advertising industry is doing fairly well. This is an indication of possible move from traditional advertisements to online advertisements by the companies. One of the major reasons being that online advertising is comparatively cheaper and hence the return on investment can be maximized. Besides being cheaper, the spending on online advertisements is performance based so it attracts all businesses rather than traditional advertisement media where the performance of the advertisements cannot be so accurately calculated.

This should come as consolation for those in the online advertising industry because they still have an advantageous edge.