Net Loss

The economy’s slowdown is hitting online advertising too, according to a report by the Interactive Advertising Bureau.

Online ad revenues for the first quarter of this year were $5.8 billion versus $5.9 billion for the fourth quarter of 2007, per the IAB, New York. That’s still 18.2% higher than for the first quarter of 2007.

The drop is further indication of a softening in Web-based advertising. A report issued this week by PubMatic, an ad technology firm, noted that the economic slowdown in the U.S. continues to affect the online advertising industry, with online ad prices bought through ad networks dropping by 0.7% in May after a 23% drop between March and April.

The report, called the PubMatic AdPrice Index, is based on data from 3,500 publishers and billions of ad impressions.

The IAB findings of a slight drop in spending online are a reflection of both the season and the economy, said Rajeev Goel, cofounder of PubMatic, Palo Alto, Calif.

“It is a cyclical effect as well as a measure of production spending,” Goel said. Prices, he added, will continue to be reflective of the state of the economy.

Or maybe not, according to the IAB.

“We expect growth to continue, as consumers spend more and more time online, and marketers find more