For the last few months, all industry forecasts for the Online Ad space indicated rapid growth despite the worldwide economic downturn and the corresponding downturn or flatness in the ad industry as a whole (weighed down by traditional media).  But now some estimates like JP Morgan’s and the others collected on Silicon Alley Insider’s post today indicate that even within Online, Display Ads may be suffering in favor of more performance-based forms of advertising (e.g. Search).

Call me an optimist, but I love the idea of tough times driving this “flight to quality.”  Display Advertising is the largest spending category after Search, yet it’s the category where performance-based accountability is the most lacking.

Granted, my optimism is self-serving because Linkstorm brings this accountability to Display Ads, and so I hope this flight to quality will drive more advertisers right into our arms.  Even Search is only “performance-based” in the sense of driving clicks (as opposed to actual conversions), and in Display we routinely drive CTR increases of 2x-5x.  (In fact we entered the market guaranteeing at least a 50% increase in CTR or you didn’t have to pay us!)

But all self-interest aside, I actually welcome these pessimistic industry outlooks, because Display Advertising needs better ROI accountability in general.  Whether this is addressed by us or any other performance-oriented vendors, the industry as a whole will benefit - and will keep seeing its revenues increase regardless of the global economic outlook - if it improves on what is so far only the PROMISE of greater ROI and accountability in Display Advertising as opposed to traditional media.


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