The Silver Lining of the Advertising Slowdown

advertising10.27.08.jpgOver at Ad Age (via Silicon Alley Insider), Michael Learmonth discusses why the online advertising slowdown might actually be good for the industry. He speaks with a number of insiders who attempt to provide some positive news, even as the world burns.

Learmonth argues the real advantage will be that the market will have time to undergo some much needed correction. Money went so quickly to the online space that the talent and companies hiring the talent didn’t have time to adjust accordingly. For example, executive salaries doubled to $300,000, well out-pacing what the employees were actually worth. The slowdown will provide a chance for companies to sort it all out. (Plus, on average it takes 2.5 times the number of staff to create a digital media campaign versus a traditional one. This is the type of fat that the industry needs to rid itself of and the slowdown offers a perfect opportunity to accomplish this task.)

Some other positives after the jump.


Whereas the last time the market crashed (in 2000) it actually had negative growth, few experts anticipate this will happen again. While dollars won’t increase as quickly as they have been, “most believe we’re looking at a few years of single-digit growth, not negative growth.” Because of this, agencies will retain jobs, filling them with better people but not cutting too many positions outright. The quality of the work will increase.

“The talent war on the agency side will be as intense as ever,” Learmonth quotes Interactive Advertising Bureau chairman Wenda Harris Millard as saying. “I don’t think there is any agency who won’t tell you that they are still starved for interactive talent.”

In essence, while the advertising world will struggle for a bit, it will ultimately come out much stronger than ever before. We hope.