Online Advertising Being Scrutinized

After Yahoo has issued a surprise revenue warning earlier this week, marketers, media buyers and internet companies are scrutinizing the health and future of online advertising.

by Patricia Bates

The warning raised concerns over whether it impacted only Yahoo or if it is the beginning of a slowdown in online advertising spending.

Yahoo said that the this slowdown (until now in automotive and financial services) was a new trend, only weeks old, and that it did not yet know if it suggested a broader slowdown.

Until Yahoo warning, signs pointed to sharp growth for online ads at the expense of newspapers and radio. Internet spending has dominated the outlook for advertising.

Merrill Lynch analyst Lauren Rich Fine, said “given the sheer size and reach of Yahoo, the news is quite concerning”. She also said that it was unclear whether an overall slowdown was to blame or “other possible reasons such as Yahoo’s own market share loss, marketers choosing to spend at less expensive properties, or marketers choosing more targeted online advertising options.”