Display advertising may suffer as the economy slows. Mixed results from the likes of Yahoo and Time Warner indicate that online publishers may be getting less money for the ad space they sell. More
and more advertisers are opting for automated targeting and delivery through cheaper advertising networks instead of buying directly from expensive publishers like Yahoo. And the cost continues to go
down, dropping 23% from March to April, according to PubMatic, a technology firm that runs an online pricing index. The drop was even steeper among large Web publishers, falling 52%, according to the
firm.
If those figures are accurate, the rest of 2008 will be painful for big media firms whose online services depend mostly on display advertising. That lengthy list includes Yahoo, AOL,
Viacom, News Corp., The New York Times Co., Disney, CBS, NBC-Universal, CNET, and many others. As Sanford C. Bernstein & Company analyst Jeffrey Lindsay says: "The weakest form (of online
advertising), the one that's most susceptible to a downturn - and this is what we're seeing - is display advertising,"
Lindsay added that recession fears might actually be a boost to some
media companies, such as those depending on automated advertising systems like search. "In a moderate or even quite severe downturn, online advertising actually improves, because people switch their
advertising budgets out of traditional advertising formats - TV, radio and print - and move more online because it's got higher performance, it's cheaper and it's more measurable," he said.
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