According to the latest data from the Interactive Advertising Bureau and PricewaterhouseCoopers, online ad spending is on track to remain flat for the rest of the year. Spending in the third quarter accounted for US$5.9 billion, only 2 percent ahead of each of the previous two quarters, Media Post reported.

Although 11 percent higher than a year ago, “ad revenue in the quarter underscored how online growth has all but stalled in 2008 in the face of deepening economic uncertainty,” according to IAB. If the situation remains, online advertising could end up increasing only 10 percent to nearly $23 billion this year, much lower than last year's 26 percent growth to $21.2 billion.

There are some speculations that next year could be “the first flat-to-down year for online advertising since 2003,” according to Media Post. Borrell Associates recently predicted that online ad spending will top out in 2009, with some segments of interactive advertising marking little or no growth.

Other analysts also downgraded online ad forecasts for this year and 2009 due to the worsening economy. Mark Mahaney, Citi Internet analyst, for instance, reduced his projection from 16.1 percent to 11.4 percent growth for this year, and from 14.1 percent to 5.8 percent for 2009.

Moreover, a bright spot could not be found in economic news this week, as unemployment numbers reached their highest in 16 years, indicating a recession is on its way, if it hasn't already begun, according to Media Post.

Media buyers, in the worsening economic downturn, keep emphasising that shifting ad dollars from traditional media to digital will shield online spending from the recession, Media Post reported.