Torrance Website Designer

Online Search Ads Faring Better Than Expensive Displays

In the past few years, Web publishers have made a big bet on booming online advertising revenues. But the economic slowdown may be throwing a wrench into those plans.

While search advertising remains strong, there are signs that the growth in online advertising — particularly in more elaborate display ads — is slowing down. In the past few weeks, major online-advertising players, like Yahoo and Time Warner, have posted mixed results.

And online publishers may be getting less money for the ad space they do sell. The prices paid for online ads bought through ad networks dropped 23 percent from March to April, according to PubMatic, an advertising-technology company in Palo Alto, Calif., that runs an online-pricing index. Large Web publishers fared the worst in PubMatic’s study, with the prices they received through networks dropping 52 percent.

These are only preliminary results, and the economy could turn around more quickly than anyone expected even a month ago. But, these numbers must be worrisome for Web portals, newspaper publishers and news media companies like CBS (which announced a $1.8 billion deal last week to buy CNet Networks) looking to expand their revenues from high-priced display advertising, like graphics-heavy banners and column ads.

“The weakest form, the one that’s most susceptible to a downturn — and this is what we’re seeing — is display advertising,” said Jeffrey Lindsay, senior analyst at Sanford C. Bernstein & Company.

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