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Internet advertising suffered its worst year since 2002 when the dot com bubble burst, but it’s still not as bad as what traditional media like radio and newspapers suffered.

Search remains hot on the web.

Internet advertising in the fourth quarter, 2009, showed an increase of 2.6% over fourth quarter, 2008, according to a recent study from PriceWaterhouse.

Overall internet advertising, however, was down 3.4% from the previous year to finish the year of 2009 at $22.7 billion.  Only in 2002 was the situation worse; in ’02 internet advertising saw a 16% drop.

Search engine marketing remains the kingpin of internet advertising as evidenced by the statistics below:

• Search — $10.7 billion +4.4%
• Display — $8.0 billion  +38%
• Classifieds — $2.3 billion -29%
• Lead Generation — $1.5 billion  -14%
• Video — $1.0 billion  +38%
• Email — $292 million  -28%

While internet advertising showed a 3.4% decline in 2009, it was not nearly as bad as the horrors that the overall advertising market experienced.  Totaly advertising spend in the USA was down 12.3% in 2009 to $125.3 billion, according to Kanter Media. 

The outlook for 2010, however, is positive.  EMarketer is projecting a 5.5% increase in 2010 for internet advertising for a total market size of $23.6 million.