Subprime Fallout Could Submarine Search Ads

    August 28, 2007
    WebProNews Staff

Mortgage lenders in the subprime market have been big online advertisers. Seeing that lending market crash down could ripple into the search industry.

It’s hard to be a big spender with nothing to spend. Lenders that made loans to risky credit types have been hurt by a massive drop in their industry.

The effects could be felt in the homes of people who have made fortunes off the advertising by subprime lenders. A Financial Times report cited the downturn as affecting two of Nielsen//NetRating’s top ten largest online advertisers: lenders Countrywide and Low Rate Source.

There aren’t any worries being voiced by the search industry yet. Microsoft’s MSN general manager David Jakubowski acknowledged the issues to, but didn’t express grave concern:

“A lot of the subprime [advertising] has gone away,” said David Jakubowski, general manager of Microsoft’s MSN service.

This loss had yet to have a broader effect in the search business, he added.

“I haven’t felt a pricing hit because of it,” he said. “We haven’t seen anything crazy happen,” though he added that the company continued to keep a close eye on this area for more fallout.

Financial advertising has long represented a lucrative market for paid search and display ads online. A downturn in that spending has been affecting Yahoo since 2006.