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

Brian.oco 0 Tallied Votes 242 Views Share

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 4,064 The Queen of DaniWeb Administrator Featured Poster Premium Member

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