The study, which included advertisers in the financial services, travel, entertainment, retail and telecoms sectors, showed that in the first three months of 2009, spend fell by 6% year on year. The figures also showed a 10% drop when compared with the last three months of 2008.
Significantly, Google, which has an 81% share of the search market, has not proved immune to the pressure on advertising. Its UK revenues for the first quarter of 2009 slumped by 9% year on year to $733m (£503m).
The fall in spend is striking when compared with the rapid expenditure growth that existed even in the first few months of the economic downturn.
The latest figures available from the Internet Advertising Bureau (IAB), for 2008, show that spend grew by 22.7% to more than £1.9bn over the year.
Paid-for search had been hailed by the IAB as 'the advertising recession-buster', with more customers searching online for cheaper goods and services.
However, some commentators argue that the fall-off can be explained in part by advertisers becoming better at targeting consumers. IAB head of research Nicki Lynas argues that marketers are not losing faith in search, but gaining from more effective online targeting. 'Advertisers pay according to performance, so they are still spending online but there might be fewer people, say, looking for holidays,' she says.
'We are seeing consumers broadening the number of brands they look at, so advert-isers can get the same level of traffic from lower, cheaper search result positions,' adds BLM Quantum's head of digital strategy, Gavin Reeder.
Efficient Frontier reports that advertisers are getting a better return on investment because the 'cost per click' is falling. 'Advertisers are not just pulling money from TV and putting it online,' says client services director Jonathan Beeston. 'They want profits, not volume, so they are adjusting budgets to get returns. This decline shows how mature the medium is.'
Google is planning to boost its revenues by introducing sponsored video search on YouTube in the UK this year. Content owners will decide where they want their videos to appear, place bids in an automated auction, and set daily spending budgets. YouTube will then display relevant sponsored videos alongside search results.
Meanwhile, a study by the IAB suggests that advertisers attempting to engage consumers through social networking sites should reconsider their strategy.
The survey, which polled 2000 consumers, found that branded groups and pages on Facebook and Twitter are ineffective.
Only 7% of respondents said they would sign up to a branded page, while just 5% would join a sponsored group. A third said that they did not want to be app-roached by brands to join groups or use applications.
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