San Francisco: After bogging down in the recession, internet advertising is regaining the momentum

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that has made it the decade’s most disruptive marketing machine.

These signs of an online revival are emerging even while advertising in print and broadcasts remain in a slump that has triggered mass layoffs, pay cuts and other upheaval. Internet advertising was just about the only bright spot in the third quarter reports of two major newspaper publishers, Gannett and McClatchy.

Meanwhile, the companies still are dealing with steep declines in print ads — an imbalance most analysts predict will take years to address.

The harsh reality is that much of the advertising in long-established media, particularly in the classifieds sections of newspapers, will never rebound to pre-recession levels, said Lauren Rich Fine, a longtime media analyst who is now a professor at Kent State University.

That grim outlook contrasts with the fact that advertisers are increasingly allocating more of their budgets to the web. That's where their customers are spending more of their free time. On top of that, internet ad rates are less expensive, and the returns on online ad investments are much more easier to quantify.

Even when they buy time in other media, advertisers are realising they need to be promoting their wares on the internet too. "You can draw a straight line from the time when people hear an ad on the radio or television to when they search for that company on the internet," said David Karnstedt, chief executive of Efficient Frontier, which helps manage advertisement campaigns on search engines.

These trends will give internet advertising 19 per cent, or nearly $87 billion, of the worldwide ad market in 2013, up from just 4 per cent, or about $18 billion, in 2004, according to PricewaterhouseCoopers and Wilkofsky Gruen Associates. That would make the internet the third largest marketing medium. Television is expected to remain on top, with $168 billion, or 36 per cent of the global ad market, down from 35 per cent in 2004. Newspapers would still be No 2, but their $92 billion in advertising revenue is projected to account for 20 per cent of the global ad market, down from 28 per cent in 2004.

For now, though, some types of internet advertising — real estate, travel and help-wanted, in particular — remain in the funk they fell into in the first half of the year, when US ad revenue on the web fell 5 per cent. (That was still far better than the 12 per cent to 29 per cent declines suffered by US newspapers, radio stations and television broadcasters.)

David Hallerman, a senior analyst at eMarketer, thinks it's too early to conclude that the entire internet advertising market is on the upswing.

"It's more like the patient had a 105-degree temperature and now it's down to 100 degrees," he said.

EMarketer expects internet ad sales in the US to fall by nearly 3 per cent in the second half of this year, slightly less than in the first half. The research firm expects a 6 per cent increase next year followed by a 7 per cent gain in 2011.

The most compelling evidence for an online recovery is being made by Google, whose search engine powers an online network that has grown from $411 million in worldwide ad revenue in 2002 to more than $22 billion annually now.