Goodbye steak dinner, hello accountability…and a blurb about Nike?

Is the recession or forth coming recession having a big impact in online advertising?

It sure looks that way. It started last week with Google’s announcement and NBC’s shortfall.

Now this week, we see further evidence that there is a flight to accountability happening right in front of our eyes.

Two more pieces of information for you:

Tuesday: Yahoo’s earnings
Yahoo stating, “We are seeing significant growth in class 2 (remnant), very strong growth in revenues and CPMs, with revenues close to doubling in that category.”

Wednesday: WebMD’s warnings
WebMd revised forecasts stating, “Based on current visibility into the second half of 2008, WebMD is updating its financial guidance to reflect a recent shift toward shorter term buying commitments in certain of its customers’ consumer advertising purchases which the Company believes is driven by increased caution in the current business climate.”

Update: Thursday: Scripps Numbers, online up 23% in Q1, cable up 15%, newspapers online flat
Offline newspapers down 8.3% to $156M, online flat at $10M. Seems like some worrisome exposure here going forward on the offline side.
Key stat maybe: Interactive Media revenue was $77.5 million for the first quarter compared with $62.9 million in the first quarter 2007. (Up a shade under 20%)

The difference between WebMD and Yahoo in this case. Yahoo Tier 2 is almost exclusively reliant on performance marketers. WebMD’s inventory is almost exclusively reliant on brand advertising.

This all brought me back to an article in the New York Times written in October of last year on Nike marketing.

It’s a good piece if you have not read it, lots of good stats.
The key takeaways and conclusions:

1) According to NYT, through Advertising Age, only 33% of Nike near $700M budget was spent on traditional media in 2006.
This writer’s take: Display advertising is largely archaic at this point, having existed online for over 10 years. I believe it is fair to lump in traditional Web ad units into “traditional” media. Nike classifies it as advertising that is about “interruption.” Banner advertisements are largely about interruption.

2) A key comment from Stefan Olander, global director for brand connections at Nike: “How can we provide a service that the consumer goes, ‘Wow, you really made this easier for me’?”
This writer’s take: This is precisely what the Web, widgets, social media apps are about. However more importantly it points to a desire for a higher production cost and distribution through virality, not placement.

It will interesting to see further announcements and branded campaigns if or as a recession hits.


No comments yet

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: