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After rising for 13 consecutive quarters, advertising sales on the Web experienced a rare drop from the fourth quarter in 2007 to the first quarter of this year, yet when measured against figures from the same quarter last year online sales were up 18.2 percent, according to a report issued Tuesday by the Interactive Advertising Bureau. Second Highest Quarterly Spending Figure In Report's 12-Year History Advertisers spent $5.9 billion online during the final quarter of 2007, while the first quarter of this year saw Internet ad spending drop slightly to $5.8 billion, according to the IAB's Internet Advertising Revenue Report which was conducted by PricewaterhouseCoopers' New Media Group. The drop was the first in more than three years - since 2004 - according to the trade group, which said the spending decrease could be accounted for by several factors. "The cyclical fourth quarter to first quarter drop in traditional media advertising spend, combined with an overall economic slowdown, resulted in a not so unexpected first quarter slowdown in the growth of online advertising," said PricewaterhouseCoopers partner David Silverman in the report, which has been compiled each year since 1996. Some industry analysts point to a traditional peak in advertising spending during the fourth quarter due to holiday spending, and Silverman pointed to yearly spending figures which rose 18.2 percent as a sign of the industry's continued strength. "The fundamentals of interactive advertising spend continues to be positive and I would expect to see continued growth in the future," Silverman said. Trade Group Sees Vitality In Online Advertising Industry A further indication that the quarterly drop seen between the fourth quarter of 2007 and the first quarter of this year is likely not indicative of a significant downward trend is that the Internet ad spending figure of $5.8 billion seen in the first quarter of 2008 is the second highest the IAB has recorded in more than 12 years, trailing only the $5.9 billion from the final quarter of last year. The IAB said that online advertising remained strong despite the sequential quarterly drop. "We continue to experience significant growth and vitality in interactive marketing, media and advertising," said Randall Rothenberg, president and chief executive of the IAB trade group. "We expect growth to continue, as consumers spend more and more time online, and marketers find more – and more innovative – ways to reach them through digital media," added Rothenberg in the Tuesday report, which is not as detailed as the group's mid-year reports that break down online spending by various categories such as display and search related ads. Internet Ad Sales See Rare Quarterly Fall, Yet Up 18.2 Percent Annually The IAB compiles its reports using information gathered from more than 275 Internet companies involved in selling and managing Web sales. An economic slowdown is seen as another possible factor in the online ad sales total falling, however the drop seen in the online ad market did not appear as severe as that of the advertising industry as a whole. "In times of economic strain, marketers and agencies are under more pressure to prove their results," Rothenberg said in a recent Los Angeles Times report. A year ago the IAB reported first quarter 2007 annual online advertising growth of 26 percent, a figure more  robust than the 18.2 percent the group saw this time, which some analysts saw as a possible sign that the industry has begun maturing, making large percentage increases less likely than in new sectors. Of the $7.3 billion spent in the U.S. last quarter on Web advertising, nearly a quarter came from Google, according to a recent study by market research group IDC. By 2011 overall online video spending is expected to jump from $1.4 billion this year to $4.3 billion, according to research by eMarketer. Over the past four years the amount of money spent for online advertising has more than doubled, according to Web publishing trade group IAB. Related Links:
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10:41 pm on June 18, 2008 (utc 0)