Web advertising to continue growth during recession: analysts
Three sets of analysts reports out this week indicate that web advertising will continue to grow, despite the onset of a recession and the end of the second web bubble.
The bad news in the reports is that the growth in web advertising will slow, but still show growth at a time other advertising markets are expected to contract.
ZenithOptimedia reported Tuesday that web advertising growth would slow, with global Internet ad spend hitting $51.1 billion this year, $61.7 billion in 2009, and $75.8 billion in 2010, down from a June prediction of $52.2 billion this year, $64.1 billion in 2009, $78.2 billion in 2010. Zennith supports the claim that advertisers will be looking for more efficient forms of advertising, and will switch offline advertising to online advertising, saying that online’s share of the overall market globally will go from 8.6% in 2007 to 13.8% in 2010, up from a previous prediction of 13.6%. The report authors said that “At a time when ad budgets are under pressure, the Internet has the advantage over traditional media that it provides better levels of measurability,” according to Clickz.
New figures from Wachovia has web ad spending growing by 10 percent in 2008, down from a previous prediction of 15%. Lehman/Barclays have are pegging growth for the year at 16.9% rather than 23.4%.
Jordon Golson at The Industry Standard takes the glass half empty approach, quoting UBS analyst Ben Schachter saying “We see no business model based on advertising or consumer spending that will be immune to a downturn” and concludes by noting “It’s time to hunker down. The hurricane is coming.”
I see the glass as more than half full. Yes, internet stocks are taking a dive, but only because the market had factored high projected growth into their valuations. The thing is though, not one analyst has yet predicted a decline in internet advertising, every single one of them is still predicting growth, and in double digits at that. More money is going to be spent online, just not as much as some had previously predicted. If there’s growth in web advertising, there’s growth in revenue to blogs and 2.0 companies that rely on advertising. That’s not bad news, that’s good news!
