Online ad boom could be flatlining

The boom in online advertising could well be over. New figures from the Interactive Advertising Bureau and PricewaterhouseCoopers shows that while online advertising shot up 34% to $1.3 billion during calendar 2007, the increase was down on the 61% jump for the previous year.

While the internet still remains the fastest growing media sector for ad revenue, the initial surge and interest in online has eased to more realistic and sustainable long term growth patterns, the IAB says.

“Online advertising growth is continuing to make strong inroads into the total advertising market and we expect this trend to continue as bandwidth issues are addressed by the Government and advertisers increasingly take advantage of the medium’s broad spectrum of capabilities,” says IAB Australian general manager Patty Keegan.

General display ads made up 28%, classifieds 26% and search engine accounted for 46% of the growth.

The strength in display surprised the industry, as it grew faster than search and classifieds. The reason for the increase was that advertisers may have been seduced into using other channels but then have returned to the tried and true display.

There are also new formats boosting display.