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Thursday, November 13, 2008

Media Gawker Guy Predicts 40-Percent Decline in Internet Revenue

Posted by Brantley Hargrove on Thu, Nov 13, 2008 at 5:00 AM

The Internet was supposed to save journalism from becoming obsolete. Blogs and Internet-only content became the rage. The curmudgeonly print journalist was scorned and told to diversify mediums or face extinction. That intangible refuge of the Internet is now looking at the same fluctuations print media has faced for years. Nick Denton, owner of Gawker Media, is predicting a 40 percent-plus decrease in internet advertising. His numbers are based on the model of a Morgan-Stanley analyst who makes a connection between a decrease in Gross Domestic Product followed by an even larger decrease in advertising. Denton takes the GDP/ad dollars correlation and looks at countries with a credit crunch for precedent--Sweden, Indonesia, Japan. At the very worst, if we suffer a collapse similar to Indonesia's in 1998, we're looking at 43 percent decline in advertising spending. I don't think the point was to incite panic among all the media companies patting themselves on the back for joining the 21st century. The point is, the Internet isn't the Golden Goose. And as the economic downturn deepens, Internet media will join print in a certain amount of trimming.

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Win-win. I hate those damn internet ads. Especially the ones that pop up all over your screen and you have to hit close to make them go away. I visited a site once where every five seconds the ad would reopen and you'd have to close it again. Hey, advertising agencies: if you think you can get me to buy a product by annoying the hell out of me, you're wrong. Not only will I not buy that product, I will never visit that website again.

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Posted by Southern Beale on 11/13/2008 at 6:18 AM

I just called your Morgan Stanley guy and he's been laid off. Hogwash...all of it.

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Posted by Online Advertising Guy on 11/13/2008 at 9:51 AM

I run several large sites and have seen my revenue drop by about 25% in the last few months. Not sure what part is due to a slowing economy and what part is just random luck. I have seen a trend where some larger advertisers are cutting back their ad inventory.
>Win-win. I hate those damn internet ads.
Large sites are expensive to run. If ad rates drop dramatically sites will cut back and let staff go. Yes, some sites run really annoying ads but they pay the price when it comes to visitor loyalty. I must admit however I am guilty of running those annoying interstationals on select occasion because of how much damn money they bring in.

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Posted by Web-O-Master on 11/14/2008 at 12:31 PM
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