Online Ads Continued to Slump In Q2

While the worst may be over, the bottom still might loom ahead for online advertising.

Data released Monday by the Interactive Advertising Bureau and PricewaterhosueCoopers show that spending on Internet advertising fell 5 percent in the second quarter “as the recession extended the first slump in online marketing since 2002,” the Associated Press reports.

The $5.4 billion spent on Internet ads during the three months ending in June compared with $5.7 billion at the same time last year, according to data released Monday by the Interactive Advertising Bureau and PricewaterhouseCoopers.

It marked the second consecutive quarterly decline in Internet advertising, the first time that has happened since the aftermath of the dot-com bust at the beginning of the decade. The fallout from that implosion resulted in eight consecutive quarters of falling online ad sales.

Fortunately, we’re still a long way from eight consecutive quarters of declining Internet ad revenue. Which is one of the reasons why — rather than panic and suspect that the end is near, a common reaction to the bursting of the Internet bubble in 2001 — the “mood is more sanguine this time,” writes AP‘s Michael Liedtke. Many Internet companies are hopeful that online ad spending will increase as the economy recovers.

The other difference between now and eight years ago is that Web 2.0 tools since have redefined online publishing, making the web experience more personal and interactive. Publishers and advertisers still are groping for new formulas in this evolving landscape, and that means more innovation and experimentation.