Wall St. Crisis Could Have Limited Effect on Web Ad Spending

AIG buys search ads to promote its car and life insurance products, and both Lehman Bros. and Merrill Lynch have bought online display advertising in recent years. Still, it may be a stretch to think any potential loss of ad dollars from the three firms will affect the online ad industry in any major way. The collapse of Lehman, acquisition of Merrill, and government takeover of AIG, however, may have a trickle-down effect on ad spending by other financial services firms and investors.

All together, AIG American International Group, Merrill Lynch & Co, and Lehman Bros Holdings spent only around $10.9 million on online display advertising between January 2006 and June 2008, according to TNS Media Intelligence data. AIG spent far more than the rest: about $7.26 million in that time span. Meanwhile, Merrill bought around $3.6 million worth of display ads since the start of ’06, and Lehman spent a measly $18,000 in that time, all of it in 2006.

The three firms spent most of their ad dollars on traditional media. TNS shows AIG spent the majority on magazines and television since 2006. Lehman did most of its advertising in newspapers and magazines, and Merrill spent most on newspapers, magazines, and TV.

The crisis on Wall Street is fresh enough to have people in all industries concerned, including Internet publishers, agencies, and advertisers. Worrying about dwindling ad budgets is one thing, but people are also concerned about the market meltdown’s effect on investment dollars for digital companies, said Jim Spanfeller, CEO of Forbes.com.

Spanfeller told ClickZ News he expects some of Forbes.com’s financial advertisers could take a break from advertising for a few weeks, or possibly the rest of the year. However, he predicted many financial advertisers will decide to jump back in, if only to make sure their messages are still being heard.

“We expect that financial advertisers may pause their advertising on the site for awhile, but don’t expect the banking crisis to have much impact on Forbes.com revenue,” said Spanfeller. He estimated about 15 percent of Forbes.com ad revenue comes from financial advertisers.

The mortgage crisis has already struck a blow to financial services ad budgets this year. According to Nielsen Online, online display ad expenditures by financial services advertisers dropped 27 percent in the first half of 2008, taking the entire online display ad market down 6 percent in the first half, year-over-year. The research firm reported yesterday financial services firms spent $1.1 billion online in the first 6 months of this year, down from $1.5 billion in the same period last year.

Online ad spending on the whole, fueled by paid search and increased interest in video advertising, is on the uptick, though. Nielsen estimates overall online ad revenues rose around 11 percent in the first half of ’08.

“The trend to move money towards the Web will outpace the economic downturn,” said JupiterResearch Senior Analyst Emily Riley. “So, all sectors will still be growth sectors in general.”

Some financial segments could experience an ad budget pinch, however. Spanfeller suggested online stock trading services might have to cut ad budgets as less money flows through markets. Firms like TDAmeritrade, E-Trade, and Scottrade, for instance, advertise on sites including Yahoo Finance, CNNMoney.com, and MarketWatch.

Riley added commercial banks and mortgage lenders will continue to reduce online ad budgets, too. “Certain pieces will dry up, so that will affect individual sites as a result,” she said.

Related reading