Conflicting Views On Current Trading Environment
A lead article and analysis in New Media Age this week shows how contradictory the current trading environment can become (even for the digital industry) – with some reports suggesting that media owners are dropping their ad rates, while others say there is still growth in online ad sales.
Front page reports suggest that AOL, MSN and Yahoo! are being forced to offer cut-price rates, in some cases for premium space, in a bid to close deals and hit targets.
However, within the analysis trading directors such as Adam Pace, head of training at Opera, said: “Spending patterns are similar to the forecasts at the start of the year”, while Diffiniti managing director Rob Horler added: “We haven’t seen a downturn.”
Talking about the possibility of top portals using price-cutting tactics, Michael Steckler, managing director of AOL’s Platform A, said: “The industry is growing fast. I’d be surprised if there was discounting going on.”
Predictions are divided over which areas might be hit by any budget cuts – Julie Jeancolas, assistant director at Carat Digital said: “If clients slash budgets then one of the first things to go will be mobile.”
Charlie McGee, managing partner at MEC Interaction, told New Media Age: “This is the biggest issue affecting media agencies. Digital ad spend is not growing as we predicted.”
He added: “Brands will be more reluctant to test in 2008 and 2009. Social media budgets will also be hit.”
Online ad spend grew 38% year on year in 2007 according to figures released in April by the IAB (see UK Online Adspend Grows Almost 40% Year On Year In 2007) and is predicted to expand further this year, however New Media Age claims that recent research shows certain areas may fall over the coming years.
Some industry bodies remain more positive about online advertising, with Danny Ward-Lee, digital sales director at Future Publishing, saying: “In times of economic difficulty, the last thing people cut back on is what they’re most passionate about.”
AOL: 01268 530919 www.aol.co.uk MSN: 020 7465 7700 www.msn.co.uk Yahoo!: 020 7808 4200 www.yahoo.co.uk