Put the axe down!
JP Morgan cut its online advertising forecast for the second time in as many months, saying it hoped the downgrade would be the last one for awhile.
The revision results from "further slowdown in the economy," according to the JP Morgan team, which slashed its 2008 forecast from 28% to 25%, and its prediction for 2009 from 19% to 13%, writes MediaBuyerPlanner.
The display ad market will slip more than expected. "Looking forward, we think [cost-per-thousands] will remain depressed and sell-through rates will worsen," JP Morgan projected, suggesting display ads will likely grow 11% in 2008 rather than the 14% growth previously predicted, and 6% in 2009, down from 16%.
Search performance will slip as well. JP Morgan believes US search will grow 23.4% in 2008 (down from 27.4%) and 17.3% in 2009 (down from 25.5%). Global search is now expected to grow 34% in 2008, versus the group’s previous prediction of 36%.
Last month, Barclays Capital (formerly Lehman Brothers) projected US online ad spend would grow 16.9% between 2008 and 2012, down from a previous forecast of 23.4%. Online will account for 13% of total U.S. ad dollars by 2011.
Meanwhile, Zenith predicts online's share of the global ad market will increase from 8.6% in 2007 to 13.8% in 2010. That rise will occur as traditional media shrinks under current economic pressure.