I’m just glad that we aren’t in the real estate business : SplashCast Blog

I’m just glad that we aren’t in the real estate business

Posted on October 28, 2008
Posted by Tom Turnbull

Stories about the economy top the news every day.  These are scary times (and not because it’s Halloween).  Depending on how things play out, we are potentially living through a once in a lifetime economic event.

How will online media companies be impacted?  The answer, of course, is that it depends.

We recently pulled together a variety of advertising forecasts.  The picture that emerges is pretty clear.

Within the larger context of the total advertising market, there are winners and losers.  Shrinking sectors (e.g., newspaper advertising) will continue to decline.  Such declines may well accelerate.

Online advertising will continue to grow.  However, certain segments (e.g., banner ads) will experience declining growth rates.

All that said, there are bright spots.  For example, video ads are in high demand.  Fortunately for SplashCast, we are focused on relatively high growth/high demand segments within the online advertising market.

Of course, forecasts are just forecasts.  Like everyone in this environment, we will be continuing (and redoubling) our hard work!  Execution will be the key.

Here is a high level summary of some of the forecasts that we have been looking at:

The overall advertising market is expected to decline in 2009

Total advertising

  • -1.4% first half of 2008 (Nielsen Monitor-Plus)
  • -4% in 2009 (Myers Report)

Older media categories are driving the declines

  • Broadcast television -4% in 2009 (Myers Report)
  • Radio
    • -10% in 2009 (Myers Report)
    • 17 straight months of revenue declines (Radio Advertising Bureau)
  • Consumer magazines -13% in 2009 (Myers Report)
  • Newspapers
    • -12.5% in 2009 (Newspaper Association of America
    •  -15% in 2009 (Myers Report)

Online advertising will continue to grow

Continuing shift to online advertising will be “somewhat accelerated” because of macroeconomic conditions (USB).

Forecasts uniformly predict moderate to healthy growth in 2009.

  • 5-6% growth (Caanan Partners)
  • 13.8% growth (Myers Report)
  • 14% growth (eMarketer)
  • 17.4% growth (Association of National Advertisers)

Additionally, digital revenues are the fastest growing component of overall agency revenue at 26.8%. (Advertising Age)

Online display growth is somewhat lower (i.e., banner ads)

  • 3.8% growth in 2009 (Myers Report)
  • 13% growth in 2009 (eMarketer)

Additionally, CPM rates for traditional banner ads have dropped. (PubMatic)

Certain segments of online advertising will grow at extremely high rates

SplashCast is focused on the most attractive segments from a growth perspective.

  • Online video, social networks, widgets 70% ($1.56 B).  Described as “booming” on October 16, 2008.  (Myers Report)
  • Video ads will grow 48% in 2009 (eMarketer)
  • Professional video is in demand and snapped up (Caanan Partners)
  • 70% of agencies using viral video will increase budgets in 2009 (Feed Company)

Time to get back to work! :)

Comments

One Response to “I’m just glad that we aren’t in the real estate business”

  1. 2009 Advertising Forecasts… « Digital_Synergies_? on October 31st, 2008 8:47 pm

    […] It does confirm common sense deduction, ODA is set to weaken a little, video is set to heat up, soci… […]

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    SplashCast is a leading provider of social marketing solutions that gives brands direct access to teens and young adults where they live: social networks.



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