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Archive for March 14th, 2009

Across all mediums, advertising $$$ is off 2.8%.

Of course, this is in line with the overall economy so it’s not totally surprising.  Advertising typically lags because the budgets go in so early into the spending season.

A recession in ad spending that goes well into 2009 is going to crush many an Internet company, more than a few agencies, and a lot of traditional media companies.  Oh, by crush, I mean put them out of business for good.

Unless you work on the ground in the advertising world it’s hard to understand just how devestating the recession is especially when consumption of media will always be going up.  That means there will always be more supply of advertising impressions and the cost of media businesses are NOT coming down.  With the ad spend so far down, the prices on this oversupply of inventory is highly depressed further adding pressure to a broken model.

Many people ask me what I think then is going to work with media companies… well, I’ve said it before… media companies have to SELL SOMETHING REAL, not just ads.  Not just an impression.  Sell DVDs, sell shoes, sell licenses, sell special events… anything.  The ad rates simply will not cover the costs of running these media companies.

Oh, and if we thought 08 numbers were bad, just wait for q1 2009 when we will see the real effect of ad budget cuts.

Yes, I’m being a bit DoomsDayish.  Because there’s not a lot of runway left for folks and if they aren’t finding a strategy to cope by now, game over.

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