With the ups and down of our current bear market and gloomy economic outlook, everyone is wondering where and how much spending will be cut in companies throughout the country. Advertising historically is one of the first areas to feel the heat, and online advertising is now a topic of great discussion. I came across a recent study by William Blair & Co. which surveyed 150 marketing pros in the greater Chicago area, looking to see what their expectations were in the coming months. According to the article:
Two-thirds of respondents said economic turbulence is affecting spending. Respondents indicated an expectation Internet advertising would grow slightly more than 16 percent in the next year. In its previous surveys, William Blair tracked 19 percent growth expectations. The areas forecast to thrive: paid search and direct response ads that can be tied directly to ROI.
This is an interesting finding, thus asserting that direct PPC (Pay-Per-Click)and SEM (Search Engine Marketing) tactics can work very effectively in an uncertain and cramped economy. Other forms of less transparent advertising, such as branding and PR do not seem to have as stong an outlook. An issue here, especially for those in the online advertisng industry, is that some of the most exciting and new advertising techniques – social neworks, video ads, and in-game advertising, are almost entirely focused on brand advertising.
My prediction is that If advertisers follow suit with the William Blair studay and make a more direct shift to direct search PPC, we will start to see social networks, casual gaming, and video streaming sites struggle to capture the conversions needed for results.