Shoring Up The Online Advertising Biz
January 29, 2009 at 13:28 PM EST
The online advertising business is in for a rough patch, especially for display advertising. The signs are everywhere. Yahoo, the biggest publisher of display ads on the Web, reported a 2 percent decline in display ad revenues in the fourth quarter, and the New York Times is seeing even steeper declines . There is just way too much advertising inventory out there, and Websites are actually trying to show less ads per page to reduce ad clutter and keep advertising rates from cratering. The chart above from comScore's 2008 Digital Year in Review shows that the number of display ads served in the U.S. is actually slightly down from a year ago. Even so, comScore estimates that 4.5 trillion ads were served to U.S. consumers last year. That comes to 2,000 ads per month per person. As a consequence of the declining display ad revenues and the over-saturation of ads, there is simply no need for the 300-plus ad networks out there. And what we are seeing now is the stronger ad networks are picking up funding to shore up their positions and the weaker ones are getting bought.