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Old 02-23-2001, 11:10 AM   #1
SGA
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Unhappy Advertising slump over. Doubt it

I posted this on another board and would be interested in hearing your opinions

As much as I wish the advertising slump was about over, we are far from it. I think it will get much worse. All you have to do is take a look at the stock market this week. If stagflation is really where we are headed, it could take 5-6 years to come around. Does anybody here remember the 1970's?

As we know when a company's stock price dives, the first part of their budget they cut is advertising. Personally I missed out on making the big bucks, I have only been in the web game for about 1 year. Probably good for me because now I don't know what I am missing.

The day Blodget said internet advertising had bottomed I mentioned it to someone who works in the financial sector and he told me "Henry Blodget is an idiot, if you want to make money do the opposite of what he says".

What is everyones opinion? When do you think the economy will recover? Do you think internet advertising has bottomed?


[This message has been edited by SGA (edited 02-23-2001).]
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Old 02-23-2001, 02:10 PM   #2
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I dont think we have seen the worst yet...
But i really hope we have... http://geekvillage.com/ubb/smile.gif
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Old 02-23-2001, 08:42 PM   #3
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Unhappy

You are right a slump in stock prices usaly means less spent on advertising, but it also means advertisng budget is spent more resourcfully which means they coudl start to look at the intenret for there advertisng needs, so it coudl work either way.

note - I note the spelling mistakes, but I htink you will all understand.
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Old 02-23-2001, 09:14 PM   #4
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Yup...the worst is yet to come...but I guess it'll be even a greater purging of those non-profitable websites or the boom of a cheaters paradise (provided if those advertisers who go for optimization based on CTR)..

Guess being a cheater pays after all.

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Old 02-23-2001, 10:55 PM   #5
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I know what you're getting at, Ex, but cheaters will always lose in the long term (as will those ad networks that don't enforce tight anti-fraud systems).

One thing that I've noticed since launching the "Articles" section on Net-Ads, which brings together analysts views, such as those expressed by Blodget recently, is that no two analysts think alike. The financially-literate amongst us will know that this has been a fact basicly since people started to analyze trends that are, for the most part, largely unpredictable. If anything was a sure-bet, we'd all make a killing in the market, but the natural order of things (and chaos theory) does not allow thjis to happen.

You should never take an analyst's views as fact. Half of the time, analysts represent a firm that expects to receive a boost from the analyst's views. For example, how many times have you heard an analyst support offer supportive views, and a buy recommendation on a deflated stock, only to find that the firm he represents has a substantial financial holding in said stock? While various investment regulators have rules in place against this type of tactic, most investment houses utilize legal loopholes in order to gain the support of the general public.

The one thing we know for sure is that the economy is slowing and may, as you said, become stagnant (or even fall). And even though Alan Greenspan has assured US-residents that they won't see a recession, they'll come very close. We're already seeing the tangible results of this in our ad revenues, and there's little doubt that the market for online ad space will remain down for some time. The fact remains, though, that the tech (and Net) industry has the potential for a greater rate of growth than any other, and interest in the medium is growing within the ranks of offline advertisers.

Online advertising is cheap, well targeted, easy to measure, and is effective. These factors will draw ad dollars towards the medium even while the economy is struggling.

We may not have seen the bottom yet, but rates will increase gradually during the next few years. Those who survive will prosper. Those who don't, won't! http://geekvillage.com/ubb/wink.gif



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Old 02-24-2001, 12:22 AM   #6
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Through my limited experience on web publishing I noticed that these guys are never right. I'm sorry but alot these high-profile analyst just don't know what they are talking about!

Hmm... maybe we can get Coca Cola to start advertising online. They can slowly make all the techies get addicted to coke...
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Old 02-24-2001, 01:22 AM   #7
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I am not a very experienced webmaster when it comes to making money on the net via advertising. But from what I have seen/heard I don't see how revenues could get worse. Advertising revenue for publishers seems to be next to nothing or non existent once you take in a site's expenses. So how could it really get much worse?

I do agree though that it will probably take a relatively large amount of time for revenues (a year or two) to pick back up again. I believe the reason why there was a huge boom in the recent months/year was because the majority of people basically viewed the net as a tree that just grows money for anyone to pick. But once they got on the bandwagon they realized it's not that easy and now are suffering from it. That is why they are now cinching their belts to recoup some of their misguided over investing in the net. But once the companys that do survive this slump recoup those costs they will be able to loosen their belts a little but hopefully not as much as they did a year ago. We all learn from our mistakes.

As far as the analysts go, ya, they all say different things and many of them are just grasping for an idea of what may happen in the future because everyone is drilling them with questions like "WHAT IS HAPPENING?" but what we need to realize is that when one of these analysts are wrong we shouldn't give them to much flack because concepts they are basing their analizations on haven't even been around that long. The concept of Macroeconomics is a pretty new philosophy and I think we still have a lot to learn/interperet.

[This message has been edited by hobbnet (edited 02-24-2001).]
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Old 02-24-2001, 01:33 AM   #8
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Maybe I've been tainted by low-brow South Park humor, but:

analizations? LOL http://geekvillage.com/ubb/smile.gif

Sounds like a word that the obscenity filter should have picked up...

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Old 02-24-2001, 03:22 PM   #9
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Dirty Mind! http://geekvillage.com/ubb/wink.gif

But hey, gimme a break, I wrote that late last night and I wasn't exactly sober.
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