ChasNote

From Business Week:

“Just last week, Barclays Capital (BCS) lowered its projections for U.S. ad spending to a negative 10% next year and a positive 1% in 2010. Every one of the traditional media platforms is getting hit, with newspapers (no surprise) taking the brunt of the pressure, with a drop of 17%, followed by TV (minus 15.5%), magazines (minus 15%), and radio (minus 13%). While other researchers aren’t offering prophesies quite so dire, one thing is clear: This is already no typical ad recession. In 1991, ad spending dropped a mere 1.9% from the prior year, while in 2001 it fell only 6.2%.

“The only bright spot this time is online advertising, which, despite a series of downward revisions, is still expected to grow between 6% and 10% next year over 2008 levels.”

Online has come of age. No longer the experimental fringe of media spending, it’s the trackable, efficient platform that is likely to benefit from a recession.

An Ipsos Mendelsohn study says rich people are trading in TV time for online time (See Ad Age):

“Respondents making more than $100,000 annually said their average hours online had grown to 22.1 each week from 10.7, while the time they said they spent watching TV sunk to 18.6 hours from 23.7 in the 2003 survey.”

Lehman Brothers forecasts year-over-year online ad spending to grow 23.4% in 2008 and and 19.4% in 2009, with video advertising growing at better than double those rates. By Lehman’s count, online will represent 6.6% of total US ad spending in 2010, more than double online’s share in 2007. Charts and graphs at TechCrunch.

Hey, it’s my site and I’m allowed to write snarky headlines.

Officially the news is this, as reported by Bloomberg: eMarketer plans to cut its 2008 and 2009 year-over-year growth forecasts for online advertising by a few more points, which currently stand at 23% and 16%, respectively.

“Google Chief Executive Officer Eric Schmidt said for the first time last month that the company, the biggest seller of online ads, faces a more challenging economic environment. Google’s ads tied to Internet search results are still faring better than much of the graphical banner ads sold by companies such as Yahoo and Microsoft.”

I have no doubt that the online advertising market, across the board, will feel the pain of the broader recession. I also agree that Yahoo, Microsoft and AOL will feel greater pain than Google. But it’s not because Yahoo, Microsoft and AOL — which sell mostly graphical banners instead of text ads — are used by advertisers for online brand-building, and brand advertising suffers more on economic downturns.

While the second part of that sentence is true, the first part isn’t. Most marketers buy low cost graphical banners on Yahoo, Microsoft and AOL for the same reason they buy text ads from Google, to drive clicks and other DR activities. Because they are less efficient DR vehicles than Google, they’ll be cut from plans first. The online publishers that have spent recent years working with advertisers on relevant, high-value, integrated sponsorships (rather than chasing Google) are going to fare better — in relative terms — than those three portals.

According to Veronis Suhler Stevenson, see MarketingVox.

No news here for folks who have participated in the television or print publishing businesses anytime in the past 50 years, but it may be revolutionary news in certain online marketing circles, especially circles in, say, Mountain View. From Ad Age:

“Now, new findings from the Online Publishers Association suggest that content is king: Ads on branded-content websites are more effective than non-branded sites and outpace industry norms in nearly every category.

“[The study] determined that ads on content sites have greater impact on the overall purchase process, including customer awareness, brand awareness, brand consideration, brand preference and purchase intent, especially among the consumer package goods, financial services, technology, telecommunications and travel sectors, giving credence to the idea that audiences are attracted to websites.”

According to a colleague in Intel’s Latin America marketing group (I missed her data source), 70% of the online population in Mexico, Brazil and Colombia read blogs, and 35% of them write blogs. Sixty-percent of Mexican Internet users and 75% of Brazil Internet users are members of social networks such as Facebook or Orkut — versus 35% of Internet users worldwide.

Projections by eMarketer for 2008-2011 ad spending in social networks have been revised downward, according to B2B Online:

“The slowing economy and the struggle by social networks to develop successful ad models have led to lowered ad spending projections for the next few years, according to eMarketer.”

A little creativity around sponsorship ideas and the industry might get itself back on track!

Some chart candy from Global Insights, originally published in BusinessWeek. Overall investment is up 2%, with the online segment up nearly 26%, broadcast TV down 1.5% and newspapers down more than 6%.

New research commissioned by Starcom, Comscore and Tacoda finds that optmizing for clicks likely means optimizing away from building brand with your best customers.

“CHICAGO – Media agency Starcom USA, behavioral targeting network Tacoda, and digital consumer insight company comScore collaborated on a research study whose results call into question click-through rates as a primary source of accountability for Internet display advertising aimed at brand-building. Called ‘Natural Born Clickers,’ the study reveals that a very small group of consumers who are not representative of the total U.S. online population is accountable for the vast majority of display ad click-through behavior.”

The power clickers have less desirable demographics:

“The study illustrates that heavy clickers represent just 6% of the online population yet account for 50% of all display ad clicks. While many online media companies use click-through rate as an ad negotiation currency, the study shows that heavy clickers are not representative of the general public. In fact, heavy clickers skew towards Internet users between the ages of 25-44 and households with an income under $40,000. Heavy clickers behave very differently online than the typical Internet user, and while they spend four times more time online than non-clickers, their spending does not proportionately reflect this very heavy Internet usage. Heavy clickers are also relatively more likely to visit auctions, gambling, and career services sites –- a markedly different surfing pattern than non-clickers.”

And there’s no correlation between clicks and brand metrics.

“Further preliminary Starcom data suggests no correlation between display ad clicks and brand metrics, and show no connection between measured attitude towards a brand and the number of times an ad for that brand was clicked. The research presentation suggests that when digital campaigns have a branding objective, optimizing for high click rates does not necessarily improve campaign performance.”

Sez Erin Hunter, EVP at Comscore:

“‘While the click can continue to be a relevant metric for direct response advertising campaigns, this study demonstrates that click performance is the wrong measure for the effectiveness of brand-building campaigns,” said Erin Hunter, executive vice president at comScore. “For many campaigns, the branding effect of the ads is what’s really important and generating clicks is more of an ancillary benefit. Ultimately, judging a campaign’s effectiveness by clicks can be detrimental because it overlooks the importance of branding while simultaneously drawing conclusions from a sub-set of people who may not be representative of the target audience.”"