Three Reasons Not to Panic When Online Ad Spending Drops 5.4%

Why You Should be Optimistic Heading Into New Year

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Bryan Wiener
Bryan Wiener
This week, the IAB and PricewaterhouseCoopers reported that U.S. internet advertising spend was down 5% in the first half of the year. Although this can hardly be interpreted as good news, digital marketers have a lot to be optimistic about as we head into 2010.

Here are three reasons not to hide under your desk:

  1. The recession has accelerated share shift. Overall adverting expenditures were down significantly more than 5% in the first half of this year, indicating that internet advertising is grabbing a larger share of the marketing pie.
  2. Search advertising continues to grow. Search spending is increasing even in the face of an incredibly challenging consumer driven economy that has hurt key search categories like retail, travel and financial services. This showcases marketers' confidence in search and digital as a highly efficient and effective channel for reaching customers. 360i believes that display will benefit from spillover search marketing budgets in 2010 as performance display takes on more search-based characteristics such as auction pricing and the flexibility to day trade in and out positions.
  3. Marketers are reassessing the role of digital. More broadly, the great recession has forced marketers to reevaluate all of their programs, which can only help digital growth given the enormous imbalance between consumer time spent online (30%) and advertising dollars spent online (less than 10%). Video, mobile and social are best positioned to benefit from shift of traditional brand dollars into digital.

While the first half of 2009 was extremely difficult, our discussions with our clients and major digital platforms lead us to believe that fourth quarter and 2010 will mark a return to growth. Moreover, digital growth should be sustainable for years to come if for no other reason than consumer behavior dictates that marketers need to be where the consumers spend their time and consumers are voting with their mouse in increasing numbers.

Bryan Wiener is CEO of digital communications agency 360i, which recently released its Social Marketing Playbook. Bryan can be found blogging at 360i's Digital Connections or on Twitter at @bwiener.
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