"There's a seasonality at play and that has been masked in the past couple years because of the strong growth," David Silverman, partner-assurance, PricewaterhouseCoopers. Traditionally the first- and third-quarter ad markets are softer.
Next two years
Internet ad-spending growth is indeed tapering off a bit. According to PwC projections, 2006 internet ad growth will be 24%, compared to above 30% growth levels for the previous two years. In 2007 and 2008 it's expected to total 19% and 15.1%, respectively.
Third quarter was also the period in which Yahoo revised down its ad revenue projections, citing weakness in the auto and financial categories -- although other online media companies said the trend was confined to Yahoo. Still, Yahoo takes in about 18% of every online ad dollar, according eMarketer estimates, so its weakness would be felt industry wide.
Mr. Silverman said he expects to see strengthening in fourth quarter, traditionally a very strong time for consumer advertising.