Digital Advertising Facing Slowdown

Media groups are facing a “reality check” as the growth in online advertising is slowed by the global credit crisis.

This is the view of Enders Analysis, which has just published research showing that revenues from digital display advertising are rising slower than predicted.

Analyst Ian Maude told the Financial Times that projected growth of 9.8% in online display ads turnover in the third quarter of 2008 represents a “collapse” when compared to last year’s increase of 30.5%.

The study from Enders also estimates that revenue from online classifieds will go up by 7.8% during the same period, in comparison to growth of 54% in 2007.

However, the report notes that paid search services offered by companies such as Google will continue to see significant growth rates.

Maude described the classifieds and display ads projections as “a reality check for online advertising”.