Despite the naysayers, online ad market continues to grow

For the twentieth consecutive quarter, the US online advertising market grew again to $5.2 billion (£2.5 billion) in revenue for the third quarter of 2007, the Internet Advertising Bureau reported this week. The quarterly growth rate is slowing, as paidContent points out, but it should also be noted that the third quarter is generally a quiet period in the advertising sector. In fact, the IAB predicts, online advertising in the US is expected to top $20 billion, a nice round number that no doubt will be on M&A specialists' PowerPoint presentations as they make their case for the next big sector take-over.

Interestingly, the IAB is citing "rich media" advert formats as the key to future growth. True to form, the IAB's announcement makes no mention of those unglamorous paid-search listings, but instead makes a fuss about "the emergence of new platforms, including broadband video, rich internet applications, mobile, and social media"  in spelling out its vision of the future.

Wishful thinking.

Search is still king as Google demonstrated last month. The web giant showed it can make more from holiday home and used guitars listings than ITV, Britain's top commercial broadcaster, can on slick 30-second spots.

Also, for those keeping score, the UK online advertising market is actually well out-performing the US in terms of growth. Last month, the IAB UK reported that first-half ad revenues increased 14.7 per cent year-on-year to £1.33 billion. It is expected to surpass £2.75 billion this year, which will put it at roughly 15 per cent of the total UK ad spend.

One high-powered ad exec is not buying the hype. Maurice Lévy, chairman and chief executive of Publicis told a media conference this weekend, "everyone is seeing advertising as the manna.”

"Far too many people are building plans based on advertising and they may well be disappointed because there is not enough money for everyone," Lévy was quoted as saying in the Financial Times.