The announcement of Yahoo! (YHOO) concerning its downturn in ad revenue is still causing some to be concerned with this area. Let's look at what has actually happened.
Like we talked about recently, one of the major reasons for slowing performance of Yahoo! is that it participated in the slowing U.S. auto industry and housing markets (financial services). These two sectors are cutting back on their advertising due to both those industries being soft at this time. They are the two biggest online advertisers which is why it caused such a huge effect upon Yahoo!
At this time online ad spending is still projected to grow at a strong pace. Citing Forrester Research, Businessweek reported:
"Despite Yahoo's unwelcome news, which on Sept. 19 caused its stock to plunge 11.2%, to $25.75, money is still pouring into online advertising as expected, says Shar Van Boskirk, a senior analyst at Forrester Research (FORR), a technology and market-research company. Forrester still predicts that online advertising spending will reach $17.4 billion this year and grow to $26 billion by 2010, making up 8% of the total advertising market that year."
The next several posts we'll deal with what all of this means to online marketers that have adopted the advertising model as their choice of strategy and, what this can teach us about the strengths and weaknesses involved in its performance for us over the long term.
Part One Part Two Part Three Part Four
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