Have we turned a corner? The ability to accurately predict the nadir of a recession is not something anyone has been able to do consistently, but analysts and advertisers are nevertheless sussing out signals that a recovery is imminent. This interactive infographic on the NYT says leading economic indicators (final slide) are suggesting the worst is behind us. A report by Publicis Groupe’s ZenithOptimedia contends the bottom of the worldwide advertising market is in Q3 2009.

Does a general economic recovery portend a rebound for online advertising? According to a recent forecast by Pricewaterhouse Coopers (highlights), yes, but when you dig a bit deeper, the answer is yes-and-no. First, the bad news. Display is expected to drop: from $4.8 billion (2008) to $4.4 billion (2013) in the US, and from $5.1 billion to $4.8 billion in EMEA. The final couple of years of the forecast period will see a modest recovery for display, but not enough to offset the drop from the previous years.

Overall spend is expected to grow through the forecast period (through 2013), so where is that expected to come from? Search. Performance-based advertising will earn a growing share of online ad spend as advertisers look to maximize ROI through search’s greater accountability, as well as take advantage of the search terms they’re targeting elsewhere (read: contextual advertising, widget/microsites, apps, etc.).

Assuming PwC’s projections are accurate, the question is what it will take for display to stop falling and resume the growth other formats will continue to enjoy. Accountability and targeting will probably be the two buzzwords on most inventory sellers’ lips, as advertisers’ expectations to understand what their spend is giving them begins to be heard.

This entry was posted on Tuesday, July 7th, 2009 at 6:08 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.