Internet advertising spending in the U.S. will be lower than expected this year and next, putting pressure on Google, Yahoo and Microsoft, according to EMarketer.
EMarketer plans to cut its forecast for 23 percent growth in 2008 by “a few percentage points,” said analyst David Hallerman.
The New York-based research firm had predicted almost $26 billion in ad sales this year. Hallerman said his estimate for 16 percent growth in 2009 is “also probably too high.”
Google chief executive Eric Schmidt said for the first time last month that the company, the biggest seller of online ads, faces a more challenging economic environment.
Google’s ads tied to Internet search results are faring better than much of the graphical banner ads sold by companies such as Yahoo and Microsoft, Hallerman said.
“Advertising is the canary in the coal mine in a weaker economy,” Hallerman said. “All the bears aren’t out of the woods yet when it comes to the economy.”
Hallerman cut his forecast in March to $25.9 billion from $27.5 billion, citing a floundering economy. Still, he said, ad spending would be resilient as advertisers continue to shift budgets to the Internet from print and television.
Since then, the picture has deteriorated as advertisers accept that “the economy won’t be turning around on a dime,” he said. EMarketer hasn’t released its updated forecast.
