The Online Advertising Bulls Are Still Running
turbotodd 100000388Y Visits (1865)
All this talk of recession has me wanting to head off to Pamplona to run with the bulls.
I had a friend who ran with the bulls once.
Actually, she didn't actually run with the bulls.
But she did stay at a Holiday Inn one night.
And she did run down one of the side streets in Pamplona to get more rioja wine, which apparently can be just as dangerous as running with the bulls.
Fortunately for her, she survived (not so much the bulls).
As for this market, only time, and a few meetings of the Fed, will tell.
GigaOm Malik was pondering the potential impact of this market on advertising, referring to a report just released by TNS Media Intelligence that outlines U.S. ad expenditures in the first half of 2007.
Here's what you need to know:
TV was down 2.4%, newspaper media was down 5.8%, and radio was down 2.7%
Internet advertising was up 17.70%
Whoa, nelly. Somebody get me a glass of rioja!
The bad news was that overall media expenditures have been down two consecutive quarters in a row.
Are we partying like it's 1999 again? Only the March 2000 Barron's article about how every startup known to mankind is about to run out of money has just come out, and fresh oxygen has just been distributed for everyone who had been trapped in the bubble???
I'm not so sure, as methinks there are at least a few differences between now and then.
One, we have a new generation of kids who grew up digital (hence the 17.70% growth in Internet advertising). That means there's a whole lot more eyeballs on a whole lot more Web pages (and smartphones, and gaming consoles, etc.)
Two, it doesn't cost as much to get into the online advertising and Web publishing game as it did back in the day (low barrier to entry, easier scaling, cheap Linux servers for the house!, etc.)
Three, the Internet market was not as global then as it is today (mucho mas eyeballs).
Of course, playing the contrarian to my optimist, and as Malik also observes, there are a lot more players fighting for the online advertising pie these days.
So, if a full on recession hits, Internet advertising will take a hit.
But it will take a hit against a growing piece of the pie, one that is already disproportionately smaller in terms of spend compared to actual media consumption.
So no, I don't think the online ad bulls of today will get trampled the way they did in 1999.
But I'm going to stand close to the wall, just in case.