For the second consecutive quarter, online ad spending has been in decline: 5% in Q3 of this year, according to IDC. The company forecast continaul shrinkage in spend for the rest of the calendar year, saying we may have to wait until mid-2010 for a meaningful recovery in online media buying in search, display, and classified advertising.

Global online spending shrunk this past quarter to $13.9 billion, versus $14.7 billion in the same year-ago period. Only the Asia/Pacific region and Japan saw slight spending gains.

All major online ad formats experienced
year-over-year revenue losses. Paid search advertising was least affected, display spending shrunk 12%, while classifieds lost 17%.

Ad sales
declined across the board for all major online publishers, frequently in the double digits.  Google, with low single-digit growth, was the sole exceptions. The biggest loser was – its 31% declineattributable both the to gasping job market as well as lagging classifieds demand.  AOL was also singled out as  one of the hardest-hit publishers.

“We think the industry will continue to see losses in
the third and fourth quarters, but the growth rates – or the loss rates, if you
will – will eventually begin to improve. However, we also believe the industry
may have to wait until mid-2010 until it sees real growth again,” said
IDC’s Karsten Weide, program director, Digital Media and Entertainment.

The complete study, Worldwide and U.S. Internet Ad Spend Report
has not yet been released.