A marketing research firm is dimming its Internet advertising outlook for the next four years, the latest sign of the more austere times looming for the high-tech sector.
In revisions made Tuesday, eMarketer estimates U.S. advertisers will spend $25.7 billion on the Internet next year — about $2.7 billion, or 10 percent less, than a forecast from just three months ago.
The more sobering projections extend through 2012 when eMarketer envisions $37 billion being spent on U.S. online ads. That figure represents a drop of $13 billion, or 26 percent, from the 2012 estimates that eMarketer drew up in August.
Since then, the global economy has been rocked by the United States’ worst financial crisis since the 1930s. The turmoil has included the collapse of big banks like Washington Mutual Inc. and Lehman Brothers, triggering a steep decline in the stock market despite huge U.S. government commitments aimed at restoring order.
The rescue plan hasn’t been enough to prevent mass layoffs and home foreclosures either, pushing the U.S. economy toward its most severe recession in more than 25 years.
The pain increasingly has been hurting technology companies that had been viewed as safe haven until recently.
Both analysts and investors reasoned high tech would hold up better than most industries because corporate customers would still want to buy computers and software that helped automate their operations. Meanwhile, advertisers were supposed to be still spending money freely online in hopes of connecting with the Internet’s expanding audience.
But those perceptions have shifted as more technology companies have acknowledged the tough times are crimping sales. The downturn has prompted already-weak companies like Sun Microsystems Inc. and Yahoo Inc. to resort to mass layoffs, but even stalwarts like Internet search leader Google Inc. are pinching pennies.
Investors already have been bailing out of technology stocks, including Google’s, which has plunged by 41 percent since mid-September. Google’s stock price fell $4.99 Monday to close at $257.44, near its lowest levels in 3½ years.
EMarketer’s new advertising estimates represent an even bigger comedown from another projection the firm made in March. Back then, eMarketer predicted Internet ad spending in the United States would hit $30 billion for the first time in 2009.
Although it’s not as optimistic now, eMarketer still expects the Internet ad market to grow by 9 percent next year. That would represent a slowdown from an 11 percent increase projected by eMarketer for this year.
Google should remain the biggest beneficiary because its system for showing ads next to search results is expected to remain an effective marketing vehicle.
EMarketer predicts U.S. search ads will rake in $12.3 billion next year, up slightly from its August estimate of $11.9 billion.
The Internet’s billboard-like “display ads” won’t hold up as well. EMarketer anticipates online display advertising will rise nearly 7 percent next year to $4.9 billion, down from its August estimate of a 14 percent increase to $5.9 billion.
If eMarketer’s projection proves accurate, it would represent yet another blow to Yahoo Inc., which is more dependent on display ads. Yahoo shares gained 82 cents to finish Monday at $10.21, but that price is still near the lowest levels since early 2003 — a funk that prompted founder Jerry Yang to agree to step aside as the company’s chief executive when a replacement can be found.
A Similar But Different Take On A Feature Film Debut
Similar But Different is not only the moniker for the directorial duo of Dani Girdwood and Charlotte Fassler but also in some respects an apt description of their feature filmmaking debut, My Fault: London (Amazon MGM Studios). The movie, which premiered last week on Amazon Prime Video, has on one level some select elements similar to what we’re accustomed to in the young adult (YA) universe--which helps make it familiar, comfortable and relatable--yet at the same time My Fault: London brings a new, decidedly different dimension to YA entertainment, uniquely meshing action-adventure, mystery, music, romance and humor. The film captures the feel of the underground London culture, lending an authenticity and contemporary vibe that’s a departure from the norm when it comes to the adaptation of YA literature. This mesh of similar but different has served the film well in that there was some target audience skepticism initially over the notion of doing an English adaptation of the popular, fan-favorite Spanish-language novel “Culpa Mia,” the first of the “Culpables” trilogy. Thus it’s most gratifying for Girdwood and Fassler to see the social media response after the release of My Fault: London, with many viewers enthusiastically embracing the film. My Fault: London introduces us to Noah (portrayed by Asha Banks) who’s uprooted from her U.S. hometown, having to leave her boyfriend and friends behind to move with her mother (Eve Macklin) to London. Mom has a new rich husband (Ray Fearon) in London and their new residence is a mansion. There Noah meets Nick (Matthew Broome), her new stepbrother. They have an immediate mutual dislike for each other which blossoms into something quite different over time. Along the... Read More