ADOTAS: How do you think the softening economy will affect online advertising?Rubicon, which helps publishers find the best rates for their inventory amongst competing ad networks, has a history of optimism when it comes to online. At the beginning of July, in response to the gloomy news out of rival firm PubMatic that CPMs were down over 20 percent for April and May, Addante countered that Rubicon was seeing rates up by 20 percent.
ADDANTE: I don't think it will. Because there is a discrepancy between where consumers are spending their time and ad spending there is a natural reconciliation that needs to occur. The audience is now, for the most part, all online. Meaning, this is where the best reach is and where the ad dollars should be spent. There might be a softening in the overall advertising spend (including creative agencies) but I don't think online advertising will be affected. Also, because one-third to half of all site traffic comes from international traffic, online advertising as a whole is less susceptible to feeling the repercussions of the U.S. economy.
Where Addante's optimism is more surprising, however, is his hope for advertising on social networks. He tells Adotas:
ADDANTE: Just by taking MySpace and Facebook into account, they are making money and rapidly growing. Advertisers are following eyeballs which are spending time on social networking sites. While direct marketers may not see the benefit of increased spending on social networks, there is definitely positives seen for search and brand marketers. We've seen a lot for growth in brand advertising as a whole and, as it continues to grow, I think a lot of that growth will be attributed to social media.
When it comes to social networking, Addante's rose-colored glasses may need a new prescription. Jupiter Research released a report in June that found branded advertising in social media is still failing to properly engage consumers. And while there may be growth in brand advertising, the current economic slump puts any business counting on brand advertising and ignoring direct marketing in a precarious situation.