Borrell: Local Interactive Ad Growth to Slow Next Year

After growing at break-neck speed for the last few years, local interactive advertising, up 47 percent this year to $12.9 billion, is poised to grow only 8 percent in 2009 to $13.9 billion, according to a Borrell Associates report released Thursday (Nov. 6). Factoring in national interactive, total interactive segment is forecast to moderate from 10.4 percent growth this year to 7.2 percent growth in 2009 for a total of $40.4 billion.

That’s still better than offline media, which Borrell forecasts will decline 2 percent next year.
Borrell attributed the slowdown in local interactive ad spending in part, to the way newspaper and television outlets sell their online assets, by offering advertisers combined ad packages.

Some segments of interactive advertising (local and national combined) will show little or now growth next year, or even decline. Standard formats, such as banners, pop-ups and display ads are projected to decline 8.5 percent to $10.6 billion. In contrast, streaming audio video is expected to grow more than 65 percent to nearly $3 billion. Paid search will remain health, growing 13.7 percent to $13.1 billion. Direct/email is expected to increase 7.3 percent to $13.6 billion.

“The bottom is really falling out of display, quicker than we had thought. Even search is slowing,” said Kip Cassino, vp of research for Borrell.