My Predictions for Online Advertising During the Recession
Lately, we’ve seen a lot of doom & gloom reports in regards to what will happen with online advertising during the recession we’re already in. We’re even seeing some of the more popular online media companies slash their workforces in anticipation that ad spending on the Internet will drastically decline in the near future. While I certainly think companies will be forced to watch their spending, especially in regards to advertising, it’s my prediction that more money will be coming to the Internet and here is why.
1) Save gas - More and more people will be trying to save money in every way possible. This will include saving gas by making more purchases online instead of driving around town looking for the best deals.
2) Smarter purchasing - As people start to really watch their purchasing decisions they will be comparison shopping online and doing more research on the web before they make purchases. This will also lead to more online purchases as they realize these are where the best deals are.
3) More time - Again, chalk this up under the people saving more money category. As people begin to watch their spending habits, it will mean less time & money spent doing things like going out to eat, going to movies, traveling, etc etc. These will give people more free time at home, which in turn will mean more time spent online.
4) Measureable - Companies that are cutting back on ad spending will only put their money in what they absolutely know provides results. This gives online advertising a big advantage over pretty much every other form of advertising as it’s all trackable down to the click/penny.
While these are general statements, there will certainly be some sectors that spending will drastically decrease online. I think that will be luxury goods, travel, automotive, and some financial sectors.
Although I feel that advertisers will cut back on banner ads and other rich media, I think that more advertisers will be moving to affiliate type CPA stuff and CPC, as well as other Search Marketing efforts. So, that means CPM advertising may slown down but overall I still think the state of Internet Advertising is healthy.
I’m curious, what are your thoughts?
Update: I’m not the only one who thinks advertising online will remain healthy.
Cameron Olthuis is the Founder of
Good predictions, while I tend to agree, I do think that online advertisers will need to get more aggressive with display ads because of reason #3. Users will be online more, I think especially to do more research before spending their dollars because of the state of the economy, and because of this, advertisers are going to need to target this demographic. I would expect to see more display and banner advertising focused on this market.
Good point Kenny! I do think some companies will get more aggressive with display/banner as well. They should be able to take advantage of slightly lower prices as other advertisers shift more dollars to search.
Excellent reasons, very precise and to the point explanation of why we should not really be panicking online. And while these reasons mainly go for online shopping, online retailers will also increase their online advertising spend as well - I can hardly imagine Amazon choosing to go for outdoor advertising this holiday season yet they may very well push more banners at potential buyers online.
I also partly agree with Kenny above in that some companies will be likely to increase their display ad spendings replacing their current outdoor and traditional media efforts with cheaper online CPM options to ensure brand loyalty for a lower price that is also measurable to a certain extent as networks provide click through rates to advertisers and they will be able to go with the publishers that are the most efficient for them.
@Svetlana - I think it will actually spread beyond just online shopping given the reasons above. High tide floats all boats.
Remember the recent Jupiter Research study that released data that shows 2/3rds of the online search user population is driven by offline media channels…yes those archaic magazines, tv and other vehicles.
The web isn’t the silver bullet…just serves as another tool like the phone book used to…albeit it much more comprehensive and entertaining.
I do agree with some of these points, though what I am finding is ad agencies trying to offer the lowest possible CPM rates which is devaluing our ad space. Also many advertisers simply go the route of Google ads b/c they are cheaper and often bypass working directly with publishing websites whom can create more effective customized long term advertising campaigns.
Gene DellaSala
President of Audioholics.com