Well here we go. I have been hinting, ranting and whining about how web entities are being sold for alarming amounts of cash. I have also ranted at SEO providers for the Rock Star and Video Game convention mentality. The answer I surmised to putting a little perspective back in both was a little magic bullet called an economic downturn or better yet, a recession maybe.
Low and behold the fun begins. Today we have the Financial Times reporting on some 3rd quarter targets that wont be getting met a Yahoo and Advertising Age is reporting on eMarketer is Lowering Online Ad-Growth Forecast. Some 10 000+ Automotive jobs a few weeks back was a good start.
It's not that I have a desire for leaner times, it more of looking for an adjustment in the cycle to get some perspective back. Some of us went through this 6 years ago...
So here's what I bumped into today. A starting point, a crack, a fissure.
Search advertising, which continued to represent 40 per cent of all online advertising in the first half of the year, is heavily dependent on small businesses, while large companies tend to focus their spending on display.
If small companies cut back on advertising spending faster in a downturn, that could leave the search business facing a bigger downturn
That's the reason e-commerce tracking firm eMarketer has lowered its ad-spending forecast this year from $16.7 billion to $15.9 billion. It's also predicting that ad growth this year will slow to 26.8%, down from previous growth rates of more 30% in past years.
Now TOTAL spending may be up, but that is mostly due to more investment into the internet. The MEAN spending is weak.
Many new internet businesses are built on a shoe string It wont take much of an economy twitter to weaken confidence and tighten up the wallets. The first shoe is off. Lets see if the other one falls. The over valuation of many Social Networking sites is in place, we merely need a few Non-Internet economic factors to fall and we could be getting somewhere.
Its time for a Reality Check
Financial Times Article; http://www.ft.com/cms/s/f55f202e-4cbf-11db-b03c-0000779e2340.html
Advertising Age Article; http://adage.com/digital/article?article_id=112100
Dot Bomb Part Duh; http://www.huomah.com/business-development/internet-business/dot-bomb-part-duh.html
Marketing Reality Check; http://www.thebusinessdevelopers.com/articles/web-marketing/marketing-reality-check.html