Wrath of Khan: I’m Back! And Advertising Isn’t!

Advertising in 2009

JP Morgan analyst, Imran Khan, has released his latest report, “Nothing But Net: Outlook for Global Internet Stocks in 2009” and to no one’s surprise, the outlook for online advertising is restrained.

Khan expects only a 6.3% increase in online display ad spending to $8.4 billion for 2009.  This is a decrease of a billion since his  prediction of $9.4 billion in September.  But, it’s still an increase in an awful economy.

Following the pack, according to Mike Shields’ Mediaweek article, Khan says, “In 2009, we believe the display advertising market will be very tough and face declining CPMs and search will still likely be a winner.”

AdExchanger.com also predicts that outdoor temperatures will likely rise as summer approaches.

Khan stated on his conference call with reporters (Imran’s got juice) that advertisers have “failed to understand the consumer demand.”

The economy plummeted a lot faster than analysts and advertisers would have ever expected and consumer demand went with it. Advertisers also had a budget allocated for a much more robust economy in calendar 2008. If they pushed that budget through, yes, they likely got pounded.

We’re contrarians here. It’s time for another prediction. (And to be fair, Imran says it’s gonna get better in the second half of 2009.)  Online display advertising in Q4 of 2009 will be strong – especially when compared to the still waters of 2008.

According to TechCrunch, Imran wasn’t the only one giving out predictions. Doug Anmuth of Barclay’s (was Lehman) said that he expects ad network consolidation in the coming year.

Only the strong will survive. But, remember – 2009 is the year of the ad exchanges. Huzzah!

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