Online Advertising Up or Down? You Make the Call


If you just read the last post I did you would see a report that touted the continued IDC logogrowth of online marketing despite the economy as reported by CMO’s of 518 companies. That’s so yesterday though. As reported in the Wall Street Journal, Market Research Group IDC reports a different point of view. Or is it? ARRGGGHHHHH!

I am a little confused by the following sentences that appear to have come from the same source about the same subject matter. The first:

Internet advertising could fall by 5% in the first quarter of 2009, the first contraction in online ad spending since the dot-com bubble burst in 2001, market research group IDC said Wednesday

Ok, so despite the information from a direct study of CMO’s who see their internet advertising going up this year by 10% the IDC sees it differently. That’s fine. Research is out there to support any point of view. The frustrating part is this following thought coming from the same source about the same report:

IDC analyst Karsten Weide said growth in fourth-quarter search ads was only barely able to offset losses in display and classified spending. He forecast that while first-quarter search ad revenue will not collapse, growth will continue slowing — and display and classified ads will most likely show worse declines than in the fourth quarter of 2008.

OK so which is it? Are they shrinking by 5% or are they growing at a slower rate in Q1 2009? This is why I like to take a quick look at these ‘reports’, acknowledge that they exist and then move on my merry way realizing that no one really knows anything and all we can do is move forward with those who are also choosing to move forward.

Projections of ad spending and everything else are now going the way of stock market projections. The formula seems simple. Take the previous quarter’s results, say that the current quarter may or may not show growth or decline or could magically do both, apply a number to it then let it loose.

How do you feel about the supposed experts trying to predict what is happening to the online advertising industry? Do you trust them? Should this have any impact on what you do in your business today? I am looking forward to your opinion.

  • http://www.lowriskmarketing.com Jordan Anderson

    It seems that these experts aren’t ready to commit to their predictions. Which makes me wonder, why would they make a predication at all? Like so many other entities in the US, it appears that they are trying to satisfy two audiences with one report.

  • http://www.tennesseelotterypowerball.net/ TennesseeLotteryPowerball

    I think the same

  • http://www.idc.com Karsten Weide

    There’s no contradiction in that research note actually: OVERALL online advertising I believe might shrink by as much as 5% in 1Q09, whereas SEARCH will continue to grow, but at a slower pace than in 4Q08.

  • http://www.frankthinking.com Frank Reed

    @ Karsten Weide Thanks for the clarifying statements. Unfortunately the way that it was reported in the WSJ did not make that clear at all.

    Frank Reed’s last blog post..Economy Turns Everyone Into a Consultant

  • http://www.internet-marketing-online-plans-and-strategies.com/ Fred Roberts

    I believe Online Advertising is growing at a slower rate in Q1 of 2009 but then I find it hard to believe that Online Advertising is shrinking.

    Fred Roberts’s last blog post..Know How To Make Sales On eBay

  • http://www.trenditude.fr Erwan

    I like your site. It seems nice. :) continue ! ^^ Erwan

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  • http://www.stepbystepblueprints.com Jason T

    Maybe the online advertising market is slowing down, but that I believe will only be temporary. The Global crisis is just putting people on edge right now. But I believe things will start to settle back on the second half of 2009. The market will readjust soon

  • http://www.mmwebmarketing.com Richard G

    I think it all depends on how much media coverage this type of forecasting gets. Everyone is trying to be an expert but the public will ultimately decide and …like the recession in general, if the media coverage is too intense and everyone believes the negative forecast – it will become a reality. We create the trends by forecasting them. Glad this wasn’t totally negative and hopefully very few people will read about it. I suggest we just keep forecasting how great things are getting which they are in my world.

  • http://www.wheredoyouthinkyouare.blogspot.com salgoud samoht

    It amazes me how shallow some comments about a fairly important topic like internet ad revenue can be. Of course if rates are reduced, then overall growth could rise while spending could also decline when compared with a previous quarter. Since the media get their revenenue from ad spending (and profits, aren’t you all still capitalists?), then it seems like the revenue might decline, while growth continues. It’s happened before. It’s called the ‘invisible hand.’ Remember? As far as “the market” goes, just which one are you are talking about? Is it the so-called global market, which is the most non-sensical reification I’ve ever heard, or is it just the 3 major exchanges in the US? (Are those 3 exchanges just 1 market? Is a corn farmer in Iowa really dependent on how well Intel does on Nasdaq?) And suggesting that the media is contributing to the recession is putting the cart before the horse, don’t you think? What would be in the media’s (another great reification) interest to do that? It’s a slaughterhouse right now. They would be publishing stories about how rosy everything is, so buy your subscription now at a special rate, we’ll ride this recession out just like the last one. After all, if the media had been ‘leading the economy’ on the issue of hedge funds, investment banks, and private equity groups’ flaky gambles on subprime mortgages and other CDOs that began to surface 13 months before the death of Lehman Brothers, then could the Bear Stearns bailout and the death of Lehman Brothers been avoided? Who knows? But they would know doubt have lost significant ad revenue from giant finanacial groups for reporting that negative data. So, at the time it was undoubtedly in their interest to keep those stories under the fold on page 26. So, get your own data, and make your own decisions. If you don’t have time, then get a job as an analyst and borrow someone’s data and interpret it however you wish, because no one ever knows the future based on past data. Leading indicators at best suggest what conditions could be possible in six months, but there is always that conditional attached to the verb, isn’t there? Finds some data for the socio-economic statitics of households in the US if you want to have a better guess in which direction the consumer-oriented US economy is headed. If you’re in Japan, then the economic stats of business still tell the story. And they aren’t good because American consumers aren’t buying cars or HDTVs or any other expensive, but ultimately unnecessary products manufactured by our large OEMs, the sales of which our export-oriented economy depends. Thank you for the opportunity to share a view from Asia.

    salgoud samoht’s last blog post..Google’s Creamy Broccoli Spam Ad

  • http://www.hydranetwork.com Sue Burton

    whether spending goes up or goes down, what I think is for sure is that accountability will go up! No one has money to burn or media dollars to waste. CMOs are going to be chanting “what’s the ROI?” as frequently as CFOs. Pay-for-performance advertising models will abound across channels. It’s not just about the creative — It’s about what can the creative make people DO?
    Clients who use CPA (Cost per Action) affiliate marketing models pay ONLY for the clients they actually acquire, generating true ROI on every marketing dollar invested. It’s highly-targeted, low-risk and high-performance marketing at its best.