Online Ad Spending Slows Down

Companies are doing everything they can to survive during this difficult time. As a result, many of them are cutting expenses, staff and advertising budgets. Lately, it seems as though all advertising forecasts are heading in a downward direction. Carat has slashed its ad spending forecasts for 2009 and 2010, SNL Kagan is forecasting a grim outlook in 2009 for both radio and spot TV, and WPP's GroupM new research predicts that outlays in 2010 will decline even more than they will this year.

Additionally, eMarketer has revised its Internet ad spending projections estimating that advertisers will spend $24.5 billion online this year in the U.S. While eMarketer put out a forecast in November 2008 which was slightly lower, it’s important to note that the lowered estimate still represents an increase of 4.5% over 2008 spending. According to Adweek, “Marketers spend more on Internet ads, while they spend less on advertising placed in other media, such as newspapers, radio and magazines. These spending shifts predate the recession, but the current economic forces both reinforce the new advertising models and make them more permanent.”

If businesses are cutting back across the board, marketing and advertising included, this could be a very costly mistake. Marketing strategies are part of the company’s long-term plan. Marketing helps brands put their best face forward and are vital to a businesses survival. Additionally, it allows companies to remain visible, relevant and connected with their customers. Otherwise, customers might go to competitors instead. While customers might not be spending as much during a recession, they are still spending. As such, it would be more effective to spend marketing dollars more wisely and not less. Ultimately, this means companies need to explore new mediums and channels, incorporate social media, utilize Internet advertising and think creatively.