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Will Online Advertising Finally Take a Hit Now?

Posted by: Rob Hof on January 11, 2008

So far, online advertising doesn’t seem to have been hit in the economic troubles growing out of the credit crunch, and forecasters are looking for 25%-plus growth this year. But with recession talk intensifying, so are worries that online ads could suffer.

Larry Dignan at ZDNet’s Between the Lines notes that Bank of America’s purchase of Countrywide Financial, a huge online advertiser, almost certainly will mean less spending by that combined entity. And Henry Blodget at Silicon Alley Insider, who has been beating this drum for awhile, thinks the online recession will hit this quarter. He thinks even Google ultimately won’t be spared.

I think the big guys like Google, especially, because search ads have such a measurable return, and even Yahoo and MSN, because of their reach, will be the last to get hit. Seems like the small sites (Web 2.Uh-Oh) and experimental efforts like social advertising (Facebook?) will get cut first, unless they can boast very compelling results to marketers. But I can’t see how anybody goes unaffected if the economy keeps tanking.

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Reader Comments

Ramon Ray

January 12, 2008 08:27 AM

That's one way to think of it that corporate mergers and acquisitions will decrease. But on the other hand web sites that show great value will INCREASE their revenues for sure. Niche sites are on the rise!

Ramon Ray, Editor & Technology Evangelist,

Karen Webster

January 16, 2008 09:35 AM

I agree, search giants like Google will continue to profit because their ads are targeted and measurable. The technologies that enable online advertising provide a much more efficient means than traditional media for doing what advertisers ultimately want: selling to consumers. Today, online ad revenue is but a fraction of what it is offline--by a factor of 15--but as more content becomes digital, coupled by the flight of ads from traditional outlets to cyberspace, there's definitely room to grow.

For more, see my blog:
Debunking 2008 Predictions
Survival Tips for Ad Agencies Online

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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