Monday, December 08, 2008

Online Ads = A Silver Lining in Dark Economic Clouds

As the New York Times and Chicago Tribune continue to bail water from their sinking ships, the outlook for print media continues to plummet, but TV and online media should weather the storm.

Today, - Zenith Optimedia and WPP's agency -GroupM - will offer detailed accounts of their ad revenue forecasts at  at the UBS Global Media and Communications Conference in New York. Online spending won't grow as much as the past year, it is still expected to increase up to 5%. Magazine,Newspaper and Radio ads, on the other hand, should continue to nosedive.

An article in today's Wall Street Journal included some figures which don't offer much comfort for anyone in print or radio. ZenithOptimedia  expects a 6.2% drop in 2009 to $161.8 billion. GroupM's prediction is slightly more optimistic.It projects a decline of 3% to $157 billion. There is a silver lining in clouds.

GroupM predicts that retailers will be under pressure following the critical holiday sales season. It says that while it has yet to see wholesale cancellations among its clients, advertisers are now watching every penny.Spending cuts probably will be most severe for newspapers, magazines and radio as advertisers shift dollars to digital media.

To summarize the forecasts,  online ads are winning the skinniest kid at fat camp award, simply because they're not falling into the dark abyss awaiting print and radio. Just look at Twitter's situation. They targeted growth over profitability, and CEO Evan Williams is a year ahead of schedule, for all the wrong reasons.

Williams admitted that he put plans to raise capital on tap for Mid 2009 and revenue concerns to 2010, but now they've been forced to rearrange their priorities. In hindsight, Facebook's $500 million offer probably looks like a much better deal than it did on Oct. 16. According to the New York Times,Twitter is planning to charge businesses who use Twitter for customer relations,such as Jetblue,Dell and Whole Foods.

Posted By Matt O'Hern at 09:46 AM
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