ValueClick (VCLK) cratered this morning after it preannounced earnings and said it was going to miss not only Q2 but the remainder of the year because the ad market is tanking. Specifically, it said it would post just a low single-digit percentage increase in display ad revenue for all of FY08, while lead generation revenue would drop more than 20%.
The big question: Are ValueClick’s problems specific to ValueClick? Or are they reflective of a true industrywide recesssion? Pali Research’s Rich Greenfield (reg. required) is worried that it might be the latter, and says he is now rethinking his estimates for AOL’s (TWX) performance for the rest of 2008:
We forecast AOL’s display advertising revenues down about 8% in Q2 (Q1 ’08 was down about 10% organically), with the back-half down mid-single digits. Combining search and ad-network revenues, we are forecasting total advertising revenues for AOL to grow low single digits in the next few quarters (Q1 was up less than 1% y-o-y). Given the weakness in display advertising and increasing competition among ad networks, we are worried our back half 2008 forecasts may be aggressive.
But we’ve done some canvassing of big Web publishers, and people familiar with them, and the consensus of our mini-poll is unanimous: The market may not be great, but ValueClick’s problems are their own.
Big Web publishers are struggling with the kind of remnant display ad inventory that VCLK sells — that’s one of the reasons MySpace and the rest of Fox Interactive Media couldn’t hit their goals this year, we’re told — but that’s not news. And ValueClick’s leadgen problems are truly its own — this is somewhat counterintuitive, but we’re told that leadgen buyers are more likely to bail out of the ad market than traditional branders. The second half of this year isn’t going to be pretty for people dependent on online ad dollars, we’re told, but it’s not going to be a disaster, either. Here’s hoping our correspondents are correct.