Online Advertising: Economic Trouble Halves Predicted Growth

Thursday, April 16, 2009

Online Advertising: Economic Trouble Halves Predicted Growth

Online Advertising Experiencing Slowed Growth

Online advertising sales were originally predicted to grow a solid 8.9% for 2009 by
eMarketer. Their revised prediction: 4.5%. Halved.

Similar revisions have come from other trendspotters: ZenithOptimedia, and Screen Digest for instance. The online advertising market is changing. ZenithOptimedia explained the revisions clearly and plainly:
"Since we released our last forecasts in December the global ad market has taken a substantial turn for the worse." [1]
It's a reality that economic trouble has slowed the growth of the online advertising industry. Coupled with the paradigm shift in the way people want to find information - and the response with increased attention to SEM and SMM, traditional online advertising is in a slump.

Responding to Slowed Growth in Online Advertising

So what does it all mean? Well, if your a publisher, it means there's less revenue out there and a plateau of places to go. More work, less money floating in the market. That's a good thing for advertisers, though. Prices should fall (as has happened with television), meaning slots should become more affordable. Allowing your advertising dollars to do more.

We'll continue to watch for innovations in the advertising space, along with providing our standard to the online advertising community: free advertising options online and via SMS.


Online Advertising said...

Online advertising is receiving a lot of bad press lately about its effectiveness.

It is not advertising that is suffering, since only the major players are exposed, the perception is that there is a decline. Coincidentally there is an economic recession which paints the doom and gloom for all industries. Online Advertising is on a major growth curve.

The appearance of an advertising budget decline, is actually the expansion of advertising space. The number of places businesses can advertise now is growing daily. This causes the advertising to be spread thin giving the appearance of the decline.

There are many new ad networks now experiencing rapid growth compared to the rate of growth of the existing well known networks. This is a normal occurrence during a major growth trend in any industry. Take the auto industry for example during the 1940s and 1950s. They had more brands of auto makers than we can even remember. The same growth is occurring with online advertising.

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Anonymous said...

I completely agree with the previous comment that that "The number of places businesses can advertise now is growing daily. This causes the advertising to be spread thin giving the appearance of the decline." Just in the online space alone there is seemingly unlimited inventory and it grows every day. At Hydra, we have seen tremendous growth in our
CPA advertising. Advertisers are demanding ROI and CPA (Cost Per Action) provides the best ROI. Instead of paying for a certain number of ads you only pay for the ones that convert. The trend for ad spending isn't down, it's for more accountability.

Glenn Friesen said...

"Online Advertising" and "Anonymous" above make a great point. Although ad spending _IS_ down, __it's down for a reason__. That reason is very likely a paradigm shift. Toward more measurement, and less subjectivity.

For too long, marketing and advertising have been too subjective. Based on wiggly numbers like "forecast impressions". The new paradigm is measurement. Online means better measurement.

Measurement is prerequisite for accountability. Great comments guys.

We're working to ensure everything on Qmania is measureable, and makes sense for online advertisers. Enjoy the service :) -

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