Danger Signals for Internet Advertising?

Michael Tchong’s Iconocast has an interesting piece in its latest newsletter that raises some questions about whether the meteoric growth of Web advertising will continue.

“Like an infant taking its first steps, Internet advertising gets up, wobbles a bit, steadies itself and then falls down again. Could this simply be a matter of growing up or are these real danger signals?,” the article asks.

A closer look at IAB ad expenditure data released at @d:tech last week shows that ad spending rose 20% in the second quarter compared to the first quarter, a much smaller growth rate than 1997’s 66% and 1996’s 75%, the article says.

A new Market Facts study reports that the percentage of users who never look at banners rose from 39% to 49% in the past year, Iconocast said. The Ad Age- sponsored study was based on a random phone sample of 2,000 U.S. adults contacted during the first week of October.

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