According to Citibank analyst Mark Mahaney, Display advertising is declining faster than expected and marketers are holding back on spending in 2009 because of growing economic uncertainty analyst.
Mahaney suggested that the online ad market is in worse shape than previously imagined.
“October spending in display saw a sharp deceleration from September as advertisers continue to worry about the macro environment,” he wrote. “Premium, guaranteed advertising, especially, has been highly impacted across all verticals.”
A separate analysis by TechCrunch of online ad revenue of the top four Web companies–Yahoo, Google, AOL and Microsoft–showed only 0.6% growth in the third quarter, down from 12.7% growth in the fourth quarter of 2007.
Citi only last week revised its 2008 Internet ad forecast downward from 16.1% to 11.4%, and its 2009 outlook from 14.1% to 5.8%. Anecdotal information picked up at the AdRevenue conference last week, suggests that estimates could be lowered again in the coming months.
“Several publishers we spoke with indicated that many advertisers have not yet set their ’09 budgets, which would have already been set by this time last year for ’08,” wrote Mahaney. “In addition, one agency informed us that some of their larger clients have preemptively cut their Q4 budgets across the board in anticipation of a severely challenged holiday season.”
On the bright side, ad budgets are shifting from traditional media (mainly print and radio) to performance-based display ads, ad exchanges and search advertising.
“As such, there appears to be a flight to quality and to vertical ad networks, especially as marketing budgets become constricted in the current macro environment,” it stated. With more than 300 ad networks in operation, industry observers are already projecting that the downturn will force the category to contract.
Budget of nearly every major company for next year have been slashed on from Marketing – Expenses but they do need to remember that to gain new business and keep there brand they will have to market threre business!
Regards,
Robbie
Founder
RegFeeNames.com
Nice post – that could be valid in the US / UK but is for sure NOT valid for the rest of the world.
Marketing online is the Life of a Company.
If there are NO Customers there is NO Business.
Company’s are making BIG profits and go bust due to GREED be it shareholders or the so called Management (or both).
Time will tell
What would a Citibank analyst know about the media industry, let alone what a ‘display ad’ is – video, sponsorship, OTP, integrated content units?
Advise from the banking industry has proven to be a crock spin of professed guess-smarts. If you really want to know the real scoop on CMO sentiments on “display ads”, try Mediapost.com.
Terence, they just put their own spin on things from “close” or “reliable” sources… It is just an analysis but this slowdown is real and evidence will be in ink next few quarters as growth will come to a halt
Mike
http://www.wannadevelop.com/