The Continent

Forrester Research estimates that growth in European online ad spend will slow to 10% in '09, down from 30% annual growth in '07.

The "European Online Advertising Through 2013" report is somewhat more optimistic than forecasts from other firms, including E-Consultancy, Enders Analysis and GroupM, which projected growth in the market under 10%, reports MarketingCharts.

"We just don't have the same level of pessimism as some of the other forecasters," bragged author/analyst Nate Elliot at Forrester in an interview with ClickZ. "Online will be hurt, just with all channels during a recession, but the fact is that online is in a better position than offline."

In the recession, display advertising is likely to suffer the worst potential cutbacks as advertisers return to direct response channels and search. (When Google announced its earnings for Q4, for example, paid search was among the few services that appeared to be weathering financial malaise.)

According to Elliott, this knee-jerk reaction will result in a window of opportunity for advertisers smart enough to take advantage of deflated display ad rates.

"Rather than abandoning display, we encourage advertisers to look for good value. Advertisers will have the opportunity to buy up inventory at low prices and apply targeting to it. Tools such as ad optimization, and features available through social networks are often under-used," he pointed out.

As display ad formats are forsaken, advertisers will increasingly turn to rich media and video — a sector expected to account for 60% of European display spend by 2013. As trusted programs like Google AdSense improve, demand for contextual formats will rise.

"People are making assumptions based on the downturn of 2002, but display, and online as a whole are in a different position now. After the last downturn, online bounced back faster than offline, and it's in better shape today than it was then," Elliott concluded.