The debate continues, but increasingly the data seems to support a shift to online advertising; yielding an increase in overall online advertising spend.

“If marketing budgets shrink, and they are often the first to be cut in a downturn, digital will still continue to grow,” said Eric Bader, managing director of digital at MediaVest.

“The focus will be on advertising that can be measured for effectiveness, and online will gain share relative to television, newspapers or radio.” (Financial Times, 2007-09-23)

While there may be a decrease in total advertising expenditure, I think we may be seeing the realization that online advertising can be far more efficient, targeted, and measurable. All factors that are driving the shift.

Online is the fastest-growing advertising sector, and could reach over $20bn this year, just over 7 per cent of the total $285bn US advertising market. (Financial Times, 2007-09-23)

In the debate, we also forget the dramatic shift in methodologies for online advertsing that has taken place since the last economic downshift. The shift from CPM, display advertising, to more targeted search and more measurable lead generation (ROI).

In the last US downturn, online spending was slashed, resulting in the collapse of many new media companies and billions of dollars of writeoffs in investments which had counted on online ad revenues.

Since then, the growth of search, dominated by Google, as well as other forms of online advertising, and the growth of networks that allow advertisers to target certain types of audiences, have increased confidence in web spending. (Financial Times, 2007-09-23)

The ironic thing is that the recent dramatic downturn in the mortgage market may accelerate this shift.

Among US mortgage lenders, Countrywide has, for example, increased its share of online ad spending from 21 per cent to 55 per cent in the last 12 months, according to Sanford Bernstein. (Financial Times, 2007-09-23)

Tags: financial times, online advertising, lead generation, marketing