Recession can be a nasty little drain on just about every aspect of business and marketing, and ad revenue is no exception. Though online search ad revenue still bests physical ad displays in cost-effectiveness, statistics show that online ads, once expanding in value, have slowed in growth and value.

According to the New York Times, both advertisers and publishers are feeling the negative effects of recession as the value of online advertising slows. However, it isn’t just the little people catching the brunt of the storm.

Even large groups like Time Warner and Yahoo! have seen a 23% drop in the amount paid for advertising by publishers through large advertising networks. Statistical results from PubMatic, a company that deals in marketing and technology, show that the prices are slowing in growth.

On the other side of the coin, publishers aren’t experiencing the massive growth in advertising revenue that even just recently existed. Growth of online advertising is slowing.

Experts believe the decrease in ad revenue value growth is due to the changing business climate as both customers and advertisers become more cautious, largely due to the tense market situation at hand. Most figure it is because customers have adopted to more short-term perspectives on shopping.

Some believe that the fear of recession could actually benefit many companies looking to cut costs while still maintain effective advertising campaigns. Sanford C. Bernstein’s Mr. Lindsay said, “In a moderate or even quite severe downturn, online advertising actually improves, because people switch their advertising budgets out of traditional advertising formats — TV, radio and print — and move more online because it’s got higher performance, it’s cheaper and it’s more measurable.”

The end result of all of this is that online advertisers and publishers aren’t suffering from recession — at least not yet. If recession goes into full swing, then everyone will feel the effects. Right now, it would seem that both advertisers and publishers aren’t much more than a little downcast that the growth of value in online marketing is slowing, and that could be on the upswing in short order.

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Entry was posted on Monday, May 19th, 2008 at 11:23 am under Advertising, Internet.

Read more entries by Triston McIntyre.
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