Underwhelmed

The majority of TV ad buyers say they think their spots are less useful than they used to be. At least according to a new study from Forrester-ANA, which surveys top advertisers: 62 percent feel TV ads “are not as effective” as they were two years ago.

The Forrester (FORR) study is full of nuggets that will cheer those who want to radically transform the TV ad model. For instance:

• Ad buyers have reduced the amount they are spending on TV and are now allotting just 41 percent of their budgets to the boob tube, compared with 58 percent in 2008.
• 66 percent think DVRs “will destroy or reduce the effectiveness” of the 30-second ad.
• They overwhelmingly hate the existing metrics used to measure TV programming.
• 63 percent think Google (GOOG) will dominate “tomorrow’s big advertising winners,” ahead of cable operators (53 percent), cable networks (47 percent) and broadcast networks (nine percent).

So when can we declare traditional TV ads DOA? No time soon. Even in decline, TV ads are a $70 billion business, give or take a billion, and it’s going to take a lot effort to move an industry that size–even mighty Google has had no luck to date.

The summary, via MediaPost:

The optimism of ad executives to boost their advertising budgets has risen to its highest point in two years, and is now at pre-recessionary levels, according to the most recent in a series of periodic surveys gauging the long-term confidence of advertisers and agency media-buying executives. The study, which is based on an index of executives who plan to boost their ad spending over the next 12-months vs. those who plan to decrease it, currently stands at a positive difference of four percentage points, the highest level since the fall of 2007, when the index stood at positive eight percentage points.

And a chart! (Click to enlarge.)

That data point comes from Advertiser Perceptions Inc., which periodically polls ad buyers about their moods–and more practically, whether they intend to spend more or less in the future.

This tracks with the last report we saw from the firm back in May. And more generally, with anecdotal stuff publishers and ad types tell us.

The usual caveats: Things are getting better, but that doesn’t mean they’re good. And online growth is good, but it’s best if you’re Google (GOOG); everyone else is going to see much smaller gains. Or, at least as likely, smaller declines.

On Thursday, the virtualization software firm reported a second-quarter profit of 20 cents a share, topping the 19 cents projected by analysts. And while sales fell to $455.7 million, they still exceeded the $452.4 million the Street had been expecting.

In a conference call with analysts, VMware (VMW) execs warned not to read to much into that though, saying they are still cautious about the economy.

“It is clear the global economy has not yet recovered and there is still some uncertainty,” CEO Paul Maritz cautioned. “In a recent survey of 150 CIOs of large businesses, 40 percent expected some downward revision in their budgets in the second half of 2009. That said, there were some signs that customers were moving on with business, even if it was buying just enough just in time.”

For the last three years, Mr. Gantz has been commissioned by storage provider EMC (EMC) to count the number of bits created each year. And each year he reports that IDC previously underestimated the explosion of information.

This is good for EMC, but it’s probably not so good for the CIOs of the world. They’re the ones who have to find room in their shrunken budgets to buy the disk arrays to store all this stuff that’s being created by employees, customers and their devices. IDC says budgets for servers and storage are shrinking by 6 percent this year.

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Goldman Sachs published its “Americas: 2009 Software Outlook” report today and it’s as dismal and ugly a forecast as you’d expect, given the current economic climate.

“The worst of the IT-spending slowdown likely remains in front of us, as we start the clock on slashed 2009 budgets,” Goldman said in the report. “We forecast 0 percent revenue growth for our group, below consensus at 5 percent, and 1 percent earnings growth, below Street at 2 percent.”

Beyond that, the firm forsees an eight percent decline in developed economy tech capital investment, with the likes of Microsoft (MSFT), Oracle (ORCL), SAP (SAP), Symantec (SYMC), CA (CA)–the so called Big 5–treading water until the economy recovers. Said Goldman, “We expect the Big 5 software companies…to benefit from more defensive revenue streams due to critical nature of functions, ‘stickier’ maintenance, stronger negotiating leverage, and a likely spending consolidation to larger vendors. Hence, we assume 0 percent growth for this group in 2009.”

Ugly. Could have been worse, though.

Those remarks promptly shaved 5.46 percent off of Google’s stock, sending its share price down to $311.75, a three-year low.

Of course, Google’s 10-Q, which was filed on Nov. 7, said pretty much the same thing, though it didn’t have quite the same effect on the company’s share price.

As result of the continued disruptions in the global financial markets, worldwide economic conditions and their impact on levels of consumer spending have recently deteriorated in many countries and regions. Any decreases in or delays in advertising spending due to general economic conditions could reduce our revenues or negatively impact our ability to grow our revenues.”