Online Ad Growth 18.2% Even in Slow Economy

July 20, 2008 - by Amanda Filder, Advertising Executive, JK Advertising

Online advertising revenue increased more that 18% to nearly $6 Billion for Q1 2008, compared to same period 2007, according to IAB (Interactive Advertising Bureau).

Online Advetising is set to continue its growth despite a slow economy with current trends estimating a 10% growth in 2009 with spending continuing to increase even with slower than normal growth in the traditional advertising media. The double digit growth is estimated to reach 15% or higher all the way through to 2011.

More and more advertisers are shifting budgets to the Internet ads as business owners and marketeers continue to be more confident with the current results and future potential. Advertisers are finding more creative methods to bring online buyers into their websites and more innovative ways to use the digital media to succeed with their sales promotions despite overall economical slowdown.

One of the biggest advertisers sectors is the financial sector (mortgage lending companies, banks, and institutions). Sever competition has forced many to advertise to reach the fewer customers that are now available due to the housing market. Many of these advertisers have moved aways from the traditional media and have increased their budget in online advertising in order to get the cream of the crop.

The biggest online ad provider, Google, is continuing to see growth in its advertising revenue. With approximately 1.3 million total AdWord and AdSense customers, a lot of whom are eBusinesses that provide their business products and services over the Internet for lower overhead costs and higher profit margin, compared to the usual brick-and-mortar businesses. Online purchasing offers convenience and often very competitive pricing and therefore attracting more and more shoppers. These shoppers are often more sophisticated, with more disposable income, and already accustomed to shopping online and wish to avoid the higher gasoline prices associated to driving to the mall.

Online advertising will continue to grow even in slowing economy. At such times, businesses cannot afford to reduce advertising even if profits are razor thin. They need the revenue to survive.