IAC reports display ads could fall 50% this month

IAC CEO Barry Diller told an earnings call this morning that he expects display advertising across IAC sites, including College Humor, City Search, Vimeo and a range of other leading web brands to drop a whopping 50% in February.

Diller also reported that CPC rates were down 8-12% in January, showing weakness in a space that many expected would hold up despite the recession.

The drops for IAC come on top of a 19% drop for the 4th quarter of 2008.

As much as the figure is shocking, it’s also not surprising given what we’ve been reporting this month. In the Web Ad Apocalypse we mentioned reports of big drops being discussed privately around the web space, then January 26 AdAge estimated the drop at 20%.

While not everyone will see a 50% drop, I’m betting that it’s a reasonable base line figure for the months ahead (notably Nick Denton predicted 40% last year). The reality is that ads are disappearing, and those that are around are being purchased at cheaper rates.

The bigger question is that if this is the online drop, how big now is the offline drop? If we believe the earlier analyst suggestions that the web will fall the least, then newspapers, and even radio and television must be doing it even tougher again.

(via AllThingsD)