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Internet advertising making a comeback

SAN FRANCISCO — After bogging down in the recession, Internet advertising is regaining the momentum that has made it the decade's most disruptive marketing machine.

The 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 Co. and McClatchy Co. 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 classified 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 easier to quantify.

Even when they buy time in other media, advertisers are realizing 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 ad campaigns on search engines.

These trends will give Internet advertising 19 percent, or nearly $87 billion, of the worldwide ad market in 2013, up from just 4 percent, or about $18 billion, in 2004, according to PricewaterhouseCoopers and Wilkofsky Gruen Associates.