Bad News for Online News
4.6% – Percentage drop in ad revenue for online news sites in 2009
The past year brought a substantial increase in the audience for online news sites. In 2009, they saw a 9.25% jump in average unique visitors over 2008, according to a PEJ analysis of the Nielsen Net Ratings list of 4,600 news and information sites. In 2009, the only other media sector to see a rise in audience was cable news, and that was due in large part to a 19% jump in Fox News prime-time audience.
But despite this rise in traffic, online advertising revenues declined for the first time since 2002. According to online research firm eMarketer’s projections based on the first 8 months of the year, revenues in 2009 were expected to fall to $22.4 billion from $23.4 billion in 2008—a 4.6% drop. This follows a modest 10% growth rate in 2008. As recently as 2006, online ad revenue was expanding by about one-third annually.
Some categories fared better than others. Search, which flows mainly to aggregators like Google, was projected to grow 3% while display advertising, the kind that news sites are most dependent on, is slated for a 2% decline. And classified ad revenue was projected to plummet 31%.
The eMarketer firm does have a more optimistic projection for 2010, predicting that as the economy slowly recovers, online revenues will reach $23.6 billion, a level slightly higher than 2008 earnings.