Threat to 2009 Online Video and Social Network Ad Spending

Based on a new Myers Reports survey of digital advertising media buyers and planners, online video and social network advertising growth this year could be considerably less than expected, while online display and search advertising could be slightly better. As marketers retrench and concentrate budgets with media they perceive (rightly or wrongly) to be tried and true, agency buyers and planners appear to be gun-shy in recommending new options.

In context, this is relatively good news for the online display advertising business, which buyers and planners project will increase five percent in 2009, compared to our projections of just one percent growth issued in December. It's also comparatively good news for online search advertising. The 200 executives surveyed last week by Myers say online search ad budgets will increase 10.6 percent, compared to the 8.0 percent growth originally projected by Myers in our December forecast.

The not-so-good news is for emerging online media options, including online video and social network advertising, which Myers originally projected to grow 25% overall in 2009 and 35% in 2010. Respondents to the Myers survey, however, are far more conservative.

While Myers uses multiple sources and input for our overall forecasts, original in-market research is a primary contributor and this new data argues that both media sellers and agencies should be considerably more conservative in their 2009 planning estimates for these categories than they might be currently.

However, online video, social network, user-generated and widget related advertising represents just a fraction of total online advertising. Overall online advertising is projected at more than $25 billion in 2009, of which less than $1.5 billion is represented by emerging categories. Search advertising is projected to total more than $13 billion and online display advertising will generate nearly $11.5 billion.

Still, for those companies that are dependent on growth in the emerging sectors of video and social networks, the conservative estimates of media planners and buyers is further evidence of economic uncertainty and fear that is undermining the total industry.

Tomorrow, we will report on a new survey of network television buyers and planners projecting network scatter and Upfront conditions.

Jack Myers advises media companies, agencies and marketers on economic issues and growth opportunities. He can be contacted at jm@jackmyers.com