Maybe The Online Advertising Market Won't Grow Forever
from the a-dose-of-reality dept
From the way it's portrayed, you'd think the online advertising market was this ever-growing juggernaut as major brands continued to shift spending away from traditional media to the internet. But the industry was surprised today when Yahoo CEO Terry Semel, speaking at a conference, indicated that the company was seeing slowness in advertising due to a pullback in both the automotive and financial areas. Just from what he said, it's not clear what inferences to draw. Certainly several auto companies are doing poorly, while at the same time retail financial activity, like mortgages, is pulling back sharply. But it seems just as likely that with the mad rush to buy online advertising, more companies are thinking twice about how much they spend in this way. Advertising is historically a very cyclical industry, strongly correlated with the strength of the economy, so while there's bound to a be continued migration from traditional media to advertising to new media, companies won't spend in this way unless they continue to see a solid return on their marketing investments.