Good Tech News? Online Ad Spending Is Slowing - But Not by Much

Brian.oco 0 256 Views

It's kind of a quiet Monday morning on Wall Street, with Treasury Secretary Henry Paulsen's proposal to further regulate and consolidate the U.S.'s financial markets (by bringing heavier Federal Reserve oversight over bank lending, hedge fund risk assessment, stricter controls over the stocks market and currencies market - even tighter scrutiny over your local mortgage broker.)

Don't get too excited - it will take months for Congress to act on these proposals, if it acts act all. Rep. presidential candidate John McCain issued a statement saying he didn't think that action wouldn't be taken until after the November elections.

The other big news, relatively speaking? China Telecom suffered a rough fourth quarter, losing 37% in revenues from the previous quarter, and off 13% for the year. The company said the increase in mobile phone usage in China is to blame, primarily. The question is, can China Telecom make up ground to Asian telecom giants like Nokia and Samsung who already dominate the market? Investors certainly don't think so.

Also, Merck's Vytorin cholesterol drug failed in a key clinical test, with an advisory board advising doctors to opt for cheaper generic drugs, instead. Investors are stomping mad that the failed trial, which actually took place two years ago, only saw the light of day today. Good point. Look for biotech stocks to get rocked today in the aftermath.

Elsewhere, online ad spending trends are in the financial news. Spending on advertising in North America and western Europe is expected to grow by 3.8 percent this year, lower than an earlier forecast of 4.4 percent, as the credit crunch saps confidence, says ZenithOptimedia, a media planning and buying firm. The firm raised its 2008 forecasts in the rest of the world to 11.1 percent from 10.9 percent but said the credit crunch's impact trimmed its global growth forecast to 6.5 percent from 6.7 percent.

Longer term, the outlooks seems fairly positive, despite the recent economic woes coursing through the world's financial markets. By 2010, Zenith says Internet ad spending will reach $67 billion, up from $61 billion previously.

Online ad spending has experienced a rough ride in 2008. I've been watching Google's pay-per-click counts, and they're down for the year. People aren't looking to spending money, online or not. But companies can't afford to cut back Internet ad spending too much - if you lose total contact with the customer, your business will suffer when the economy picks up again and people start spending again.

That's why the Zenith numbers are encouraging. Online ad spending will grow, just at a slower pace for a while. We take what we can get.

Dani AI

Generated

A few practical takeaways that build on 's observation (and the correction noted by ): forecasts and headlines move fast, but advertisers control their response. Short-term shifts in spend are normal in tougher markets; the priority is protecting return and preserving customer contact so recovery is easier.

First, tighten efficiency before cutting reach. Pause or trim low-performing keywords and placements identified by CPA/ROAS, add negative keywords aggressively, and use dayparting/geotargeting to concentrate budget where it actually converts. Shift resources to high-intent audience slices and remarketing lists that keep your brand in front of people who already showed interest.

Second, treat conversion rate improvement as your highest-leverage activity. Small lifts on landing pages—faster load, one clear offer, fewer form fields, and focused messaging—often beat marginal increases in traffic. Run small A/B tests, instrument events so you can optimize by behavior (not just clicks), and prefer value-based bidding when lifetime value is known.

Third, preserve a scaled-down brand/demand program. Cutting all awareness spend reduces search volume and raises acquisition costs later. Use cheaper, measurable channels (email, remarketing, contextual search) to maintain presence at a lower cost per impression.

Finally, measure and act fast. Build a simple dashboard that tracks impression share, CPC, conversion rate, CPA, and a leading indicator like weekly conversion volume. Set objective stop/scale rules and run controlled experiments on offers and creative rather than blanket budget slashes.

This approach keeps costs under control, preserves customer contact, and positions campaigns to scale quickly when conditions improve.

Member Avatar for Dani
Dani 5,664 The Queen of DaniWeb

Please see this story for a correction.

Be a part of the DaniWeb community

We're a friendly, industry-focused community of developers, IT pros, digital marketers, and technology enthusiasts meeting, networking, learning, and sharing knowledge.

Edit Preview