Online Advertising: Too Many Ad Pages, Too Few Ads

Internet display advertising is being challenged by the recession. Traditional media is not the only business being hurt as marketers curtail spending to save money.

Barry Diller recently said that the display advertising at the sites his company controls was down 50% in January.

Now big internet sites are up against a by-product of their own success.  Their advertising inventory is rising at double-digit rates.  But, there are no clients to buy those impressions.

Yahoo!, Microsoft’s (MSFT) MSN, Time Warner’s (TWX) AOL, and the large websites controlled by News Corp (NWS), Viacom (VIA), and NBC could see their display advertising revenue fall by 30% or more in the current quarter.

According to The Wall Street Journal, “Yahoo’s network of sites attracted 146 million unique U.S. visitors in January, by comparison. Such scale can still be a draw for big advertisers.”

Online advertising is starting to look like the newspaper business.

Douglas A. McIntyre