The Web Ad Apocalypse

The predictions of a massive downturn in web advertising due to the US recession started last year. Gawker Media’s CEO and Founder Nick Denton, one of the smartest men in blogging and a guy I’d never tell anyone to ignore, predicted a 40% downturn in web advertising this year.

Let me say that I think, sadly, that his prediction may be right.

Our own ad provider has dropped so much inventory this month it’s scary. As others have suggested, the worst of it was always going to be January; Q4 2008 ads were booked in advance, Q1 2009 were directly influenced by the recession, hence the lower spend.

I’ve talked this last week or two with a variety of people in the blogging space, and I’m yet to find anyone with a good news story. The rate of the drop in ads for January varies widely by supplier, so while some are still only showing a small drop (with companies that have manged to maintain most of the business) others are telling me of huge drops well past 40%.

This of course doesn’t excuse our ad provider, who cited the recession in their justification; the conclusion is that some are doing better than others.

Although obviously I don’t have the full picture, the sample is big enough for me to draw some conclusions, and they aren’t pretty. Advertising in blogging and 2.0 services/ apps is on the downward march, and companies that rely on advertising that were marginally profitable, or running at a loss are about to find life that much harder.

Outside of direct deals, I’ve also heard from some publishers that passback inventory rates are declining. Adsense has been mentioned, but that’s not my experience so far. We had a spike up to the US Election which delivered some of the best rates I’ve ever seen in Adsense, and it has dropped back since. Having explored a couple of ad suppliers for that inventory, I would note that some rates are very low at the moment, but I don’t have the history to know if there was a drop.

If you’re interested in selling ads for The Inquisitr, particularly our passback inventory (which is 90%+), drop me an email duncan at nichenet.com.au

To everyone else out there in blogging and 2.0 land, you’re not alone, and god speed.