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Online advertising takes a hit

June 5, 2009 |  1:32 pm

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Online advertising was hurting in Q1. Credit: Pascale Pirate Chicken via Flickr.

Remember when Internet marketers said they'd be immune to the recession because online advertising is more accountable? Well, it hasn't quite worked out that way.

Internet advertising revenue was $5.5 billion for the first quarter of 2009, a 5% decline from the same period last year, according to a report released this morning from the Interactive Advertising Bureau.

The 10% decline from the fourth quarter, when revenue surpassed $6 billion for the first time, is the biggest decrease, percentage-wise, since at least 2001.

"The first quarter was really freak-out time this year," said Jose Villa, founder of Sensis, a Los Angeles interactive ad agency. "Everybody just slammed on the brakes."

Companies were deciding whether they should even advertise, he said, because they thought it might look bad to be spending on marketing in a tough economic climate.

"It was an unusual three-month period," he said. "It wasn’t really rational, and it went across all media."

By the second quarter, people started cautiously spending again, he said, indicating the next numbers  from the advertising bureau shouldn't be so scary. At least, that's what the IAB is hoping.

"Interactive media continues to gain share of marketing spend," Randall Rothenberg, president and CEO of the IAB, said in a statement. "We're confident that growth will resume as the U.S. economic climate improves."

-- Alana Semuels

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