Only Some Online Advertising Does Well in a Recession

Over at Seeking Alpha, there’s a nice run from the Fourth Annual Internet Media Dinner, with a subtle point about the recession and online marketing. While the conventional wisdom is that online advertising fares better in a recession, mainly due to lower costs of a media buy, better (or at least easier to judge) ROI, and the ability to target consumers, not all online advertising is going to do well. From the story:

Management from Bankrate, TheStreet.com and Forbes.com all commented that they are seeing advertisers purchase smaller media buys that run as shorter campaigns; these campaigns are also being booked with shorter lead times. As of late May, all 3 publishers were still booking campaigns for June (typically these would be booked further in advance). Comments were also made toward advertisers pushing hard for metrics to demonstrate performance and return. (This was perceived somewhat as a paradox, given many of these advertisers run significant television campaigns where tracking return on spending is in fact harder to measure.)

Further signs of the recession came up in a discussion of ad networks; management all agreed that the vertical ad networks made sense and would do well during this slowdown, but that general or horizontal networks would experience problems – “nothing beats contextual advertising in an online world” was echoed by each panelist.

In other words, places like ValueClick or Burst Media, which place ads on broad swaths of websites, also using bargain or remnant ad space, should be worried. As every marketer knows, ad budgets are the first thing to get slashed when times are tough (though that may not be the smartest move), and as there’s less ad dollars to spend, the current craze vertical ad network, with some analysts pegging verticals growing by 43% in 2007, is going to intensify.