Ad Downturn, Challenge or Opportunity?

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uturn1.jpgADOTAS — You hear it often, the first quarter will tell the tale.

Everyone is bracing for a rocky first quarter and looking around wondering who will be here by the end of next year. The good news, such as Amazon, is leavened by the ton of bad news we have had. There is no one that I spoke to who believes that the beginning of the year will be smooth.

Michael Arrington, from his talks, has predicted that advertising, especially display, could dip between 30 to 80 percent. On the (maybe) bright side that means rates will be lower and opportunisitic companies can take advantage.

Some top ad network sources say it’s time publishers finally woke to reality.

They have been demanding unreasonable prices and placing absurd restrictions during the boom,” one source said. “Now maybe they will find out what it takes to survive.”

How low can rates go? Outside of the major brands, it doesn’t seem the margins are all that large to me now. But I imagine the leaner sites, which keep costs and resources low, will be able to absorb the discounted ad rates easier.

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