Online A Rare Bright Spot Amidst Plummeting Global Ad Spending

Apr 20th, 2009 | By | Category: Making Money with Podcasts, The New Media Update

For a gloomy start to the new work-week, digital marketing and media researcher/analysts eMarketer has an article this morning, detailing a bleak outlook for media around the world that rely on advertising revenues to get by.

eMarketer looked at planned advertising spending, calling the spends “a barometer of economic confidence.” The company has examined at the forecasts and plans of three major worldwide advertising buyers, all of whom “[give] the situation [a] thumbs down:”

  • GroupM, a “leading global media investment management operation,” and parent company to WPP media agencies, foresees a 4.4% decline in global ad spending for 2009. The biggest drops in ad spending they see coming in North America, Western Europe, and what they call “Emerging Europe.”
  • Aegis’ “digital media solutions” business Carat Insight forecasts an even more grim picture, pegging 2009′s worldwide ad spending decline at 5.8%, with the biggest declines coming from the United States and Central and Eastern Europe.
  • Rounding out their dreary outlook, eMarketer cites ZenithOptimedia, the media-buying unit of Publicis, the world’s fourth-largest advertising group.  Zenith has revised their 0.2% decline predictions downward (upward?) to an expected 7% worldwide ad spending decline in 2009, including an even greater expected 11% downturn for magazines, and 10% for radio.

Is it time to panic? Throw in the towel? Retrench and completely rethink revenue streams? A data set from three advertising buyers (even if they are big, with a global reach) is not by any means comprehensive, but their own individual findings and forecasts are well-informed and cause for concern.

A closer look at the grim advertising forecast, though, reveals a great big bright spot. Internet advertising around the world continues to grow, projected to be up 8.6% this year—to reach 12.1% of overall global ad spending. That finding is also borne out by a number of other recent reports, studies, and surveys:

Business Insider reported last week that online advertising is the fastest-growing ad medium in history.

The Internet Advertising Bureau released information in March that indicated that, even as other media falter, Internet advertising revenues grew to a record $23 billion in 2008.

A recent report from Forrester finds that marketers are moving their ad dollars to social media. Even eMarketer had an optimistic report last month about the planned spending increase in social media marketing for “best in class companies worlwide.”

As the ad revenue outlook for traditional media worsens, will online venues continue the trend toward higher advertising revenues? Or will the effects of the overall economic downturn worldwide have ramifications that affect Internet-based media as well?

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One Response to “Online A Rare Bright Spot Amidst Plummeting Global Ad Spending”

  1. msbpodcast says:

    And this is a surprise how exactly?

    Imagine you’re in charge of a company’s advertising budget.

    You’ve made the pitch and they bought it. Seven figures worth of creatives and production. (Its a series of media spots and shooting starts in 30 days.)

    Imagine that you’ve got to put together a pitch for a media buy.

    On on hand you have the internet, with its point-to-point message delivery and links back to a web site created for the campaign, through which it can advertise, meet compliance, capture customer information, take orders, track shipments, handle CRM and Quality, PR and complaints. Its a “One Stop Shop” and your client has total control over (and total responsibility for,) every phase of message and product delivery. The ROI goes way beyond hiring the “Town Crier”.

    On the other hand you have broadcast (television and radio,) magazine and newspaper ads and PR where success is always iffy and the media can’t take care of anything beyond just getting the word out because they’re not connected to anything. The ROI is like you’ve just hired the “Village Idiot”.

    Which do you think the client is likely to go for?

    The “other hand” is going to come straight for your face.

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