Search Ad Boom Bad News for Heritage Media?
New figures released by eMarketer show online ad spending surged 20% in the second quarter of 2008, despite the downturn in the US economy.
The figures broken down however paint an interesting divide: in hard times, people are switching to search advertising over display advertising, with search set to hit a 42% share with the majority of that spend heading directly to Google.
Portfolio though notes the side affect of the switch: Heritage Media relies on display advertising, so any switch to search makes it harder for magazines and newspapers to build substitute online revenue to cover their declining heritage media assets.
It’s an interesting notion. I haven’t been able to get a full breakdown on eMarketer’s figures, as the unknown mix is does Adsense fall into the search figure given both are delivered by Adwords, as Heritage Media can run these units. But lets presume that Heritage Media does take a hit on two sides, what does this leave us?
This isn’t a zero sum game, there is still a display advertising market, and it still pays, so there is still money to be had online for Heritage Media. But the lower numbers can only result in further constraints, speeding up the bleed from Heritage to New Media. It will force media companies to become more efficient, more quickly, with a real likelihood of some dying more quickly that we might have previously thought. If the advertising pie isn’t big enough, the game becomes scale, and quick, lean and efficient companies are the ones who are best placed to survive.