Is the drop in internet advertising getting worse?

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In January several large internet companies reported that their online display ad CPMs were off 20 percent or more from the same month a year ago. Now it is beginning to look like that drop has accelerated to 30 or 40 percent in February -- and March is not looking better.

The most ominous sign of falling ad rates: the number of advertisers who only pay rock bottom for ads is getting larger. Ads from companies that used to pay premium rates, especially cars and financial services firms, have almost disappeared.

A look at some of the most visited sites on the internet is telling. The main page of MSNBC is carrying weight-loss/diet ads. The Times of London is running free credit report ads on its main page. These cheap ads can now be found on almost every major website.

According to AdWeek, online advertising agencies are beginning to see a sharp drop in their business.

Big media firms that hoped internet revenue would bail them out in the first quarter may be out of luck.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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