We’ve argued that the mortgage crisis is likely to trigger a slowdown in online ads that could have ugly repercussions. One of the many counter-arguments is that even as the home loan business blows up, both mortgage companies and other financial advertisers will continue to pour money into web advertising — because they need to keep lending money and because it’s cheaper to attract customers online than anywhere else.
Well, a new report from Nielsen/NetRatings on U.S. Web advertising appears to support the more sanguine thesis. In July, four mortgage/financial advertisers showed up on Nielsen’s list of the top 10 Web advertisers (PDF). All four show up in the August list released today, and three of the four increased their ad budgets — including imploding Countrywide Financial, which increased its ad spend from $34.8 million to $35.4 million.
So are we wrong about the risk the mortgage crisis represents for the Web advertising business? We hope so. But we’re not abandoning the gloomy thesis just yet.
Countrywide’s implosion did not begin until mid-August, when Merrill Lynch downgraded the stock to SELL and Countrywide sucked down an emergency $11.5 billion on its credit lines. (And it wasn’t until last week that the company began firing employees). The month-to-month rate of growth of Countrywide’s online ads (per Nielsen) slowed in August, with a $30 to $35 million jump from June to July, which could signal a change in trend. Lastly, we continue to worry less about what has happened than about what is yet to come–especially with Fed governors now jawboning about how the housing bust is affecting the rest of the economy. But, that said, Nielsen’s August report didn’t provide additional cause for alarm.