Total ad spending — online and offline — is expected to fall 7% in 2009. This is a direct result of the economic meltdown, no doubt, but while traditional media will certainly not return to the pre-crash levels, there is reason to believe that online media will come back even stronger, because when the economy recovers (basically, when your toddler gets engaged), the spoils will go to online media. But right now, for an entire generation of executives and entrepreneurs, it’s a constant struggle, not to thrive, but merely to survive.
From AdAge:
- “Online advertising isn’t immune to the recession, and it’s only just begun.”
- “Like in 2001, online media is fighting for its very existence.”
- “There are companies that are going to go out of business this year,” said David Moore, chairman of WPP’s 24/7 Real Media.
The following is arguably the most important thing I’ve read in ages, and every media executive and entrepreneur needs to print it out and stick it everywhere:
- “And at least one speaker suggested publishers face extinction if they think advertising is going to save them. Bob Carrigan, CEO of tech publisher IDG Communications, said he no longer sees traditional advertising as a growth business. Rather, his company is relying on lead generation and an ad agency-like “media services” division that creates custom websites and custom content to pay the bills.
“We love standard media and sell ads all the time,” Mr. Carrigan said. “But we’ve seen a lot of companies become extinct or on their way to extinction because they protected their legacy businesses too much.”
What does this mean to your business?
1 -The Metrics That Suddenly Matter?
Considering that all of a sudden, ad-supported models are out of vogue, are unique users, pageviews, impressions and even average time spent on a site less important? I am not sure if this is the case for your business, but it is for us. I tell anyone and everyone who cares to listen about WatchMojo.com’s surging all-time and monthly streams, but those matter if we lived in an ad-supported ecosystem. The truth is, what drives our top line is licensing revenue (guaranteed deals), so the key metrics are quantity, quality and frequency of videos.
2 - The M&A Game as Survival?
Equally important, if everything media companies have done in the past few years are based on the desire to maximize value in an ad-supported model and ads shrink and dry up, then maybe all companies need to be in constant M&A talks so that they are in a position to partner with others, hoping that this would increase their odds of survival.
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