Peter Kafka

Recent Posts by Peter Kafka

Ad Sales Are Either Okay, Growing Slower, or Soft. Pick Your Answer!

Given that the world’s economy seems to keep teetering on the precipice, it’s no surprise that ad spending might pull back a bit. And we’ve seen predictions to that effect for some time.

Now we’re starting to hear some ad sellers and buyers tell us that things are indeed slowing down this fall. But the stories aren’t consistent, so it’s hard to figure out what to make of them quite yet.

Yesterday, for instance, Time Warner Cable said that its ad sales had been soft last quarter, and that would continue through Q4. But Time Warner Cable’s main business is selling subscriptions to consumers, not eyeballs to marketers. So, hard to tell if that’s a harbinger.

This morning, though, ad giant WPP cut its full-year growth forecasts because of slowdowns in the U.S. and Europe and an “increasingly challenging economic environment.”

But the ad guys aren’t consistent about this stuff. A few hours later, ad holding company Interpublic said that it was hanging on to its 2011 forecast, even though “macro uncertainty remains.”

This is normally the point where digital optimists tell us that even if traditional ad markets get hit, digital will do fine, because marketing dollars are still transitioning from offline to online, and online buys are much more efficient, etc.

And all of that may be true. But I took a quick survey of some digital ad sellers in the past couple days, and heard uneasiness from them, too. The mild version: “Companies are pulling back and being more selective with spend versus spreading it across the board.” The more alarming one: “If you ask around, all you’re getting from anybody is ‘brutal.’ Dollars have dried up.”

Again, this is profoundly anecdotal, so I’m happy to hear from folks with different experiences — my hunch is that Facebook is still moving very quickly, by taking share from a variety of competitors.

More important, no one is yet suggesting that we’re entering the dark days of 2008-2009, when ad spending went negative — so far, people are just talking about not hitting sales goals they made earlier in the year. Hopefully that’s as bad as it gets.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work