Surprise! The WSJ reports that online advertising is not actually immune to the worst financial crises in our lifetimes (http://online.wsj.com/article/SB123558776209174437.html). At this point, it almost sounds comical to assume otherwise – with the rest of economic world crumbling all around us, why would we assume the internet would provide a safe haven?
Actually, as Sara Lacy points out on Techcrunch (http://www.techcrunch.com/2009/02/25/online-ads-even-the-evangelists-turning-bearish/), there are a few interesting reasons why internet advertising should remain resilient on a relative basis –
1) “Online advertising is more actionable and more measurable than advertising in the offline world”
2) There remains a major discrepancy between relative amount of consumer time spent online and the relative ad-dollar spent online
A third point, I might add:
3) Online advertising, on a relative basis, is still cheaper than other forms of marketing such as television advertising – so corporate cost cutting measures might first whack TV ad budgets before moving to the less costly internet marketing budget
Unfortunately for the internet ecosystem, even these compelling factors are not strong enough to counteract the hurricane headwinds of the global economic crises. IDC is now predicting internet advertising may actually contract by 5% in the first quarter of 2009, representing the first contraction in online ad spending since 2001.
While this reflects a troubling trend, I do not believe it is a result of a systemic shift with regards to internet advertising. As the economy recovers and corporates begin rededicating resources back to marketing budgets, we might even begin to see newly reinvigorated shift towards of internet marketing as companies will likely emerge more sensitive to cost-effective and measurable marketing channels.
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