The True State Of Online Advertising, If There Is One

    February 26, 2009

If you would just read the last post I did you would see a report that touted the continued growth of online marketing despite the economy as reported by CMO’s of 518 companies. That’s so yesterday though. As reported in the Wall Street Journal, Market Research Group IDC reports a different point of view. Or is it? ARRGGGHHHHH!IDC logo

I am a little confused by the following sentences that appear to have come from the same source about the same subject matter. The first:

Internet advertising could fall by 5% in the first quarter of 2009, the first contraction in online ad spending since the dot-com bubble burst in 2001, market research group IDC said Wednesday

Ok, so despite the information from a direct study of CMO’s who see their internet advertising going up this year by 10% the IDC sees it differently. That’s fine. Research is out there to support any point of view. The frustrating part is this following thought coming from the same source about the same report:

IDC analyst Karsten Weide said growth in fourth-quarter search ads was only barely able to offset losses in display and classified spending. He forecast that while first-quarter search ad revenue will not collapse, growth will continue slowing — and display and classified ads will most likely show worse declines than in the fourth quarter of 2008.

OK so which is it? Are they shrinking by 5% or are they growing at a slower rate in Q1 2009? This is why I like to take a quick look at these ‘reports’, acknowledge that they exist and then move on my merry way realizing that no one really knows anything and all we can do is move forward with those who are also choosing to move forward.

Projections of ad spending and everything else are now going the way of stock market projections. The formula seems simple. Take the previous quarter’s results, say that the current quarter may or may not show growth or decline or could magically do both, apply a number to it then let it loose.

How do you feel about the supposed experts trying to predict what is happening to the online advertising industry? Do you trust them? Should this have any impact on what you do in your business today? I am looking forward to your opinion.