Search advertising fell 8 percent in the fourth quarter with small companies, automobile makers, travel businesses and financial firms sharply cutting spending.
Advertisers cut their budgets in October and November in response to the accelerating downturn and then increased them modestly in December, said Efficient Frontier.
The quarterly decline is the first on record.
Google and Yahoo’s share of the ad spending edged higher while Microsoft saw its search advertising market share slip.
At the end of the quarter, Google had 70.7 percent of the market, Yahoo 19.7 percent and Microsoft 4.2 percent, Efficient Frontier said.
Financial advertisers cut their spending by 16 percent, automotive companies by 30 percent, and travel and entertainment firms by 26 percent. Retailers spent more.
Businesses spending less than $50,000 a month on search advertising cut their spending more substantially than large firms.
Search ad spending was stable through most of 2008, but fell in the fourth quarter, says Efficient Frontier
