Greg Sterling triggered an exchange on his blog last week - the dialog centered on “what would the impact of a US recession be on local online advertising?”
I offered up two possible scenarios, described below. I thought it might be interesting to turn this back over to you all. Which direction do you think makes sense (of these two choices)? You can answer in the poll widget on the right.
1. Recession would be a great catalyst to growth in interactive spending:
In the reasonable recession scenario of tightened ad budgets of local businesses, the appeal of performance-based models is high. I can therefore see this to be a trigger to trial.
Post recession, the print ad business may no longer be the beneficiary of the rebound, this could this just become the catalyst for scaled interactive media spend, to the possible detriment of print budget allocations.
2. Recession would drive a retreat to known, proven models, keeping print alive and well:
In a recession, the need to secure your existing base of business may cause businesses to retreat to “safe havens”. Tried and true ad products are fortified against offers to just “take a little of your budget and try this”.
When small businesses have survival challenging worries, change is often slow. The perceived risk and distraction factors of interactive advertising will cause the SME to retrench. Despite the intellectual argument of low risk and measurability, businesses will simply slow their pace of trying new things.
Greg’s answer, in case you are curious, was:
2. is psychologically probable but 1 is more “rational.”
Proof positive that he was a lawyer in a prior life ;)
