Online ad market stabilises – next period will be interesting

By November 30, 2009Advertising

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This chart showing US online advertising spend offers a glimmer of hope for internet businesses everywhere, but it is too early to call this a trend.

There are some good reasons to be positive right now, alongside the continuing good news on the macro economy I keep hearing stories about the effectiveness of Facebook’s new targeting system and the continued growth in ecommerce can only bode well.

These good news vibes are offset by the following:

  • The overall market is still below Q4 2007 numbers and we have only seen one quarter of improvement
  • We could be on the cusp of a significant shift from paid media to earned media – i.e. away from buying ads to facilitating engagement that results in consumer advocacy

I’m starting to get excited about the potential for startups in this second area.  The next couple of quarters will be interesting both for that and for the market overall.