In some circles the coming ad recession is like global warming: There’s no more debate about whether it’s real. The only argument is who gets hurt, and how badly. In other words – will the ad slump beat up the Web, too?
Scott Kessler, senior director for equity research at Standard & Poors, is in the “yes” category. At a panel discussion at the McGraw-Hill Media Summit, he said he’s knocked down his estimate for 2008 Internet advertising growth from 21% to 19%. Next year it will shrink to 17%, he said: “I don’t think there’s any question there’s going to be an impact.”
At the other end of the spectrum, Web optimists say a mild ad pullback could help digital. “A recession is great; it’s going to force people into digital and accelerate the pay-per transaction model,” said Marc Ruxin, SVP for digital at McCann Worldwide. “It’s going to be great for people in the digital space.”
Also in that camp: Dean Carignan, director of ad business strategy at Microsoft (MSFT), who says a recession will hit brand advertisers, which account for 30% of Web spending, but not direct-response advertising, which accounts for 70%. Ian Schafer, CEO of indie ad agency Deep Focus (and SAI contributor) was also upbeat . “We just had our best January and February on record, ” he said. “In some ways we welcome the recession because it gets clients to scrutinize their existing relationships with their ad agencies.”
And, for the record, SAI chairman Kevin Ryan, who was also on the panel, thinks online media has a pretty good future, too.