Everyone Can Go Home Now

It’s over. It was fun while it lasted, but you might as well pack up and go home now.

What? You haven’t heard? Online advertising is over. Basta. Curtains. Finito.

At least, you might think it were so in the wake of reactions from Wall Street and the mainstream media to Yahoo’s bad day earlier this week.

Yahoo CEO Terry Semel and CFO Sue Decker told investors the company started seeing slower growth in automotive and financial advertising on its network over the past two or three weeks, and that softening will hit its bottom line this quarter.

Despite the fact Yahoo isn’t even lowering its guidance — in fact, its revenue continues to grow — its stock immediately plunged 11 percent and took Google’s share price with it for part of the ride.

The doomsayers began. “Online advertising scrutinized after Yahoo warning,” warned Reuters. “Does Yahoo’s profits warning herald a similar sea change in online advertising?” asked “The Times.” “Bad News for Online Ad Networks, Publishers?” queried another publisher. Broadcast media were no exception.

Has the industry that turned over $12.5 billion last year and nearly $4 billion in Q1 of this year (according to Interactive Advertising Bureau/PricewaterhouseCoopers data) just run out of steam?

I’m no Wall Street analyst, but I seriously doubt it.

“As Goes General Motors, So Goes the Nation”

It’s amazing how quickly Yahoo’s announcement was taken out of the context of two rather beleaguered industry sectors and made mainstream.

Mortgage rates are back up, and lenders are one of the major financial sector advertisers. The automotive industry, meanwhile, is in abysmal shape. Ford, GM, and Chrysler are foundering. Digitas lowered its revenue guidance in July in part because of spending cuts by GM, remember? TNS Media Intelligence estimated GM cut its overall ad budget 17 percent in the first half of this year. (The fact that Digitas is American Express’ digital agency of record may not bode well on the financial sector slump-wise, but that’s still unclear.)

This summer, gas prices hit all-time highs. Piper-Jaffray analyst Safa Ratschy says the auto ad spend slowdown is seasonal and will recover when new models are introduced at the end of the year.

As Gary Stein astutely observes, in the light of immediate economic issues requiring quick budget pullbacks, online’s much easier to adjust in the short term than outdoor or broadcast. Gary also notes that earlier this year, advertisers and publishers were bemoaning the severe shortage of online inventory, and since then it’s been blossoming with players of considerable magnitude. Everyone from YouTube to blog networks are looking for their own slice of the online media pie.

Danny Sullivan saw Yahoo’s plunge as an opportunity to reopen his plea to the major search engines to please parse the numbers between search ad revenue and display advertising. I don’t think anyone in the industry seriously believes Yahoo’s problem stems from search revenue, but rather on display — and more accurately, branding — ad dollars, on which the portal is way more dependant than its counterpart. And as Danny points out, the automotive and financial sectors tend to spend heavily on the branding side of the equation.

The much-overlooked roll-your-own media trend cannot be disregarded when brand advertisers pull back from media buys. Since I raised this issue a year ago, it’s only increased, particularly in the automotive and finance sectors. Jeep’s had the Mudds. The site’s now down, but the campaign lives on at YouTube, along with spots for Volkswagen and any number of automotive brands. And don’t forget BMW films, which pioneered the whole offsite movement.

Amex, meanwhile, is going gangbusters with My Life, My Card (remember its popular Superman/Seinfeld campaign?). Banks are expanding their Web presence with campaigns like Chase’s Love the Double; Visa’s Life Takes Visa; and MasterCard’s Priceless.

What do automotive and financial have in common? Both are extremely high-education and information-curve sells. Display advertising won’t go away for either sector, but its purpose will be to drive users to sites into which the real dollars are invested.

But not to the point where Yahoo, or any other portal, goes begging. As an eMarketer analyst quipped to me the other day, “Any other industry seeing 16 percent growth would be pretty happy.”

I couldn’t agree more.

Meet Rebecca at E-Mail Marketing, the first in the new ClickZ Specifics conference series, October 24-25 in New York City.