• Advertising Age, Monday, July 28, 2008 12 PM

Despite a slumping economy, the future for Web advertising looks bright -- if the flow of investment dollars is any indication. But Ad Age reminds us that the overall advertising pot is far from bottomless. Money may be flowing online from the likes of TV and print, but it certainly isn't an endless flow.

"The inconvenient truth" is that ad budgets are freezing while large clients decide to spend their available dollars on Web development, public relations and database marketing at the expense of paid advertising. After all, ad spending among the top 100 U.S. advertisers last year grew just 1.7%, with measured media up a paltry 0.3% -- and most of the top 100 advertisers are still primarily TV and print spenders.

Should the fact that the likes of P&G spend just 1.5% of their marketing budgets on display ads be viewed as a warning or an opportunity to Web publishers? The fact is, TV and old media still work for these large clients; the Web still has yet to prove itself as an effective branding medium. As Rob Norman, CEO of Group M Interaction, says: "The biggest gating factor to internet ad growth is the obsession of the players, the (venture capitalists) and the press with 'bottom of the funnel' marketing in a world where the big money is spent at the top."

Read the whole story at Advertising Age »