A general recession is generally not considered to be a good thing when it comes to advertising, but a recent article in the New York Times seems to indicate that the slowdown is worse for offline advertising than for online. But one foreboding statement in the article sent a chill through my body.
And online publishers may be getting less money for the ad space they do sell. The prices paid for online ads bought through ad networks dropped 23 percent from March to April, according to PubMatic, an advertising-technology company in Palo Alto, Calif., that runs an online-pricing index. Large Web publishers fared the worst in PubMatic’s study, with the prices they received through networks dropping 52 percent.
Yes. That appears to be confirmation for the many people who have claimed they’re earning less with their ads. As the recession grips the ad business, expect a smaller slice of the slice of the pie for the same ad space as usual.
That’s the type of thing that could hurt morale. But before you jump off a bridge, consider what Mr. Lindsay of Sanford Bernstein had to say about the current situation.
“In a moderate or even quite severe downturn, online advertising actually improves, because people switch their advertising budgets out of traditional advertising formats — TV, radio and print — and move more online because it’s got higher performance, it’s cheaper and it’s more measurable,†he said.
Wheew! Looks like we shouldn’t panic just yet. If the downturn continues on, we may very well expect to see more money heading online, although we’ll probably get a small piece of it than in the past. These are interesting times to be a web publisher.