Home Writer’s Strike Helps Online Ad Sales

Writer’s Strike Helps Online Ad Sales

Even with the home mortgage meltdown in the US theatening to pull the econonmy into a recession, analysts feel confident that the online ad market will remain healthy. “We believe the secular growth of the Internet will enable Internet fundamentals to outperform,” wrote Piper Jaffray senior research analysts Aaron Kessler and Gene Munster in a report last Monday. “Whereas Internet advertising budgets were the first to be cut during the market crash in 2000, we believe the proven high ROI of online advertising today will make online advertising resilient even with a recession in the United States.”

But whether the Internet remains recession-proof or not, the mortgage crisis will affect the world of web advertising in very real ways.

Last week, Larry Dignan pointed out that the recent $4 billion take over of Countrywide by Bank of America will be felt in the wallets of Google, Yahoo! and Microsoft. Countrywide, it seems, has been the web’s second most prolific advertiser over the past two months, spending over $57 million in November, and $38 million in December.

“It’s highly unlikely that Bank of America will spend so lavishly on online advertising,” writes Dignan. “Simply put, Countrywide’s penchant for advertising will disappear. To Bank of America CEO Ken Lewis Countrywide’s willy nilly ad spending will just be more fat to cut.”

The good news for Google, et. al., is that help may be on the way from an unlikely source: the Hollywood writers strike. As the strike drags on, and original primetime TV content dries up, advertisers may begin to jump ship for other mediums. Chrysler, the third-largest automaker in the US, already has, choosing to run ads on sports and the Internet instead of primetime television.

The strike “is changing the whole broadcast model,” said Chrysler marketing cheif Deborah Wahl Meyer. While analysts don’t think Chrysler’s move to jump ship from primetime TV advertising is an indication of a television industry in crisis, it could certainly signal the potential start of a trend. Many striking writers have already turned to the Internet as a place to ply their trade and with advertisers on board, the strike could hasten a paradigm shift in the media landscape that sees content shift from television to web distribution.

Related: Online Ad Spend to Jump in 2008 Thanks to Sports, Politics

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