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As the economy continue to slow, more and more marketers are being forced to make tougher decisions about where their advertising dollars are being spent.  Online advertising, which has been growing fast over the past decade, will start to tighten its collective purse-strings.

Already, publishers like Yahoo!, Bankrate, and Edmunds are forecasting and/or blaming the economy for softening revenues.  Just months ago, it seemed as though the online advertising industry would get through this tough economy unscathed, but publishers and ad networks continue to report disappointing earnings.

David Hallerman, an analyst with EMarketer Inc., believes that online advertising is “not going to grow as much as expected, but it’s still going to be growing more than other media.”  Online publishers should prepare themselves as display advertising will take the brunt of the cutback.

“Advertisers have pulled back in a pretty meaningful way, and display is feeling the brunt of it,” said Clay Moran, a Stanford Group analyst

Analysts speculate that search-engine advertising, which accounts for 41% of all online ad revenue in 2007, will remain strong as companies see this as a means of engaging active users.

Although the current model of display advertising isn’t the panacea for marketers, isn’t engagement of a targeted, but passive user of tremendous value?  Through the use of behavioral and geographical targeting, the publisher can provide branding opportunities as well a direct connect with the customer.

The Online Publishers Association recently completed a study title “Improving Ad Performance Online: The Impact of Advertising on Branded Content Sites.”  The study ultimately determined that ads on content sites have greater impact on:

• The overall purchase process
• Brand consideration
• Customer awareness
• Brand preference and purchase intent

Search engine marketing needs to be a part of any online marketing budget, but it is through display advertising on information sites that brand favorability and purchase intent improve.  According to the OPA, brand favorability improves 29% over average online advertising; purchase intent increases 20%.

The lessons learned from traditional media still apply.  It is the contextual value and the sponsorship of trusted media that starts the passive user on the purchase process path.

This entry was posted on Tuesday, August 5th, 2008 at 5:54 pm and is filed under Advertising, Marketing, Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.