Online ads won't save you

Bambi Francisco Roizen · February 24, 2009 · Short URL:

Companies relying on CPL and ad-agency-like services will survive

 If you're relying on online brand advertising to come back soon to save your media business, think again.

At the IAB conference, a gathering of online publishers, many believed that a lot of media companies are going out of business this year and that like 2001, many will be fighting for their lives.

From Ad Age: 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."

The reality for publishers is they're facing a flat market at best in 2009. Including search marketing, online ad spending will grow 4.3% in 2009, but display advertising will essentially be flat, growing slightly to $8.27 billion from $8.1 billion in 2008, according to Citibank internet analyst Mark Mahaney.

The good news, if there is any, is that Mr. Mahaney is expecting a 20% rebound in 2010, largely due to share shifting from newspapers, yellow pages, direct mail and local TV and radio.

And online, like every other medium, is fighting for its share of a shrinking pie. Total ad spending -- online and offline -- is expected to fall 7% in 2009.

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Bambi Francisco Roizen

Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.

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