Tuesday, January 29, 2008

Standing Strong in a Recession

The impending (or already present, depending on whom you ask) recession may well jeopardize the projections for continued growth in online advertising. When budgets tighten, advertising is less likely to get whacked, but ask managers in June if their second half budgets are higher.

The cuts could come in old media depending on the philosophy of the organization. They may see social nets and video as too risky, and opt for the trusted TV buy. Conservative companies who have faith in online could move away from PPC campaigns to lead generation or pay per action campaigns that only pay when the transaction is more likely to lead to a sale.

Of the top dogs online, eBay and Craigslist may see more volume as consumers look for bargains instead of paying retail, or the sad fact that folks who are having trouble making ends meet may offer goods for sale. Ditto for leisure sites such as Priceline and Hotels.com.

Google and Yahoo may suffer more than others, and startups like Joost may have trouble gaining traction with advertisers. We could be in for a long year as the recession could dampen enthusiasm for and investment in Web 2.0.

Posted By John Gartner at 08:14 AM
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