Many consumer-facing web companies are relying on advertising in one form or another. Therefore, the internet ad spending (or lack thereof) will have a great impact on many companies.
Some data points on ad spending in Sweden (source IRM, as published in Internetworld Nr 3, 2009):
- Internet ad spending grew from 1.5 billion SEK in 2004 to 4.8 billion SEK in 2008 (CAGR of 34%)
- During the same period, total advertising grew from 25.5 billion SEK to 32.3 billion SEK (CAGR 6%)
So far so good, with growth in both offline and online but with online increasing its share of total ad spending radically (up from 6% in 2004 to 15% in 2008). Although I don’t have the data points, I would expect a similar development in the other Nordic countries.
But what will happen next?
According to Veckans Affärer (Swedish Only), ad spending in Sweden is expected to drop 20% during 2009, primarily affecting traditional media but also affecting internet advertising (down 31% in January 2009). A few months earlier, Internetworld (Swedish Only) reported that IRM expects a drop of 4.7% in total ad spending and internet ad spending growing 7% (still significantly slower than previous years).
On a European level, Forrester Research (as reported in Internetworld nr 3, 2009) expects internet advertising to grow on average 9% per year until 2013 instead of 13% which they previously forecasted (and compared to 30% growth in 2007).
To conclude, the recession has already impacted both offline and online advertising but relatively spending continues to move online. As for online, search is expected to increase its already strong position and grow faster (11% CAGR from 2008-2013) than display and classified ads (8% and 3% respectively) according to Forrester Research.
Usually, less established forms of advertising suffer more from a recession so my guess is that for example mobile and in-game advertising in the short term probably will grow much slower than previously forecasted and from very small volumes.