The Economist makes the bold assertion that Internet advertising will emerge from the global recession relatively unscathed. Of course, history notes that online advertising fell 27% from 2000
to 2002 after the bursting of the dot com bubble sparked the last major economic downturn. "Yet the Web has changed a lot since 2002,"
The Economist claims.
Online advertising is
"much less speculative" than traditional advertising in the sense that performance can be tracked and ads can be targeted to specific audiences. Because of these efficiencies, marketers are starting
to treat certain forms of online advertising -- particularly search -- as a cost of sales. Meanwhile, as other ad sectors contract, online advertising is on track to grow in 2009 -- although
admittedly not as fast as many research firms had predicted. EMarketer, for example, has now twice revised its 2009 spending estimate downward. At last count, the firm said U.S. online spending would
grow 8.9% during a year when most economists expect U.S. GDP growth to be close to flat or even negative.
Meanwhile, there is plenty of room for growth within the industry. In particular,
advertisers are excited about the prospects for video and social media advertising. For example, Google's YouTube is a potential goldmine of video inventory, but so far nobody has found a way to
advertise on a large scale. The company is now experimenting with overlays and sponsored video clips for specific search terms, but testing is in its early phases. Same thing for social networks
MySpace and Facebook: they are experimenting with several new ad systems that have yet to bear fruit, but once they do, look out.
Read the whole story at The Economist »