• BusinessWeek, Tuesday, September 23, 2008 11:32 AM

Advertising Week is underway, but the financial crisis is perhaps the most pressing topic facing those marketers and advertisers who've converged on Madison Avenue this week. BusinessWeek reminds us that a weak financial sector means financial services firms have less money to spend on advertising, even online advertising.

When budgets are tight, advertisers stick with proven methods like search, placing less emphasis on experimental campaigns in sectors like social media and mobile. As Russell Fradin, president of Adify, which creates ad networks for companies, says, "Mobile and social networks will be hit." He adds that for the greater online ad market, "the first six months of the next year will be slow." Matt Sanchez, CEO of video ad network VideoEgg, thinks the slowdown could last up to a year. He anticipates that less well-funded firms will have a difficult time surviving.

Meanwhile, researchers were cutting back online spending estimates even before the AIG bailout and the demise of Wall Street's independent investment bank structure. In August, eMarketer cut sector growth projections to 17.4%, compared to 25.6% in 2007. Next year, growth will be even slower, the firm said, at 14.5%. "Online advertising will not grow as fast because of the economic problems," eMarketer senior analyst David Hallerman says.

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