As the Economy Droops, So Does Online Advertising

(MoneyWatch)  Following up on my post from yesterday, another survey today, with another set of gloomy results for advertising, both online and offline. William Blair & Co. surveyed 150 marketing pros in the Chicago area, looking to see what their expectations were in the coming months. From the AdWeek article:

Two-thirds of respondents said economic turbulence is affecting spending. Respondents indicated an expectation Internet advertising would grow slightly more than 16 percent in the next year. In its previous surveys, William Blair tracked 19 percent growth expectations. The areas forecast to thrive: paid search and direct response ads that can be tied directly to ROI.

"Online's healthy, but the economy is definitely having an impact," said Sean Riegsecker, CEO of Centro, a Chicago ad service for newspaper sites, in a conference call to discuss the findings. "In a weak economy, people are going to move more towards direct response. We're seeing brand advertising take a much bigger hit this year."

An issue for online advertisers, however, is that some of the great hopes of online advertising, including social neworks, video ads, and in-game advertising, are almost entirely focused on brand advertising. Placing advertising inside a game means that I register the brand, but am unlikely to buy the product -- I'm playing a game. Video advertising still suffers from low engagement numbers, meaning that advertisers must content themselves with impressions over acquisitions. And social networks, as everyone now realizes, may simply be a bad place to engage consumers.

If advertisers are truly about to shift more towards direct action, expect to see search advertising continuing to dominate, while other areas, such as social networks, casual gaming, and video streaming sites, continue to struggle to monetize eyeballs.