For years, even after the economy began to buckle under the weight of a recession, online advertising revenue remained relatively strong. But a new study, released on Friday, shows that fiscal malaise has finally – and fully – struck the digital sphere.
According to the Interactive Advertising Bureau and PricewaterhouseCoopers, online ad revenue in the US market sank to $5.5 billion in the first quarter of 2009, down 5 percent from $6.1 billion in the fourth quarter of last year. It is the first major slump of its kind since the burst of the dot-com bubble in 2002. (Revenue levels dipped – although not this drastically – in 2008.)
The news could be especially troubling for magazines and newspapers, which have increasingly turned to the web to make up for the loss of print ad dollars. Over the past few months, many outlets have shuttered or cut back on their print operations. In February, The Rocky Mountain News, the oldest newspaper in Colorado, ceased printing, and in March, the Seattle Post-Intelligencer shut its presses.
Remaining papers, such as the Boston Globe, have struggled to deal with declining print ad revenue – much of it lost to Craigslist, and other classified sites – while shifting to a web-centric marketing strategy. (In April, the Christian Science Monitor began publishing its daily edition online only.)
Hat tip: email