If you attended the roundtable discussion on the "State of the Industry" last Wednesday at Ad Tech in NYC you would have thought this was boom time in the online advertising business. Jeff Levick of AOL, Carolyn Everson of MTV, Amy Banse of Comcast (all representing the sales side of the house) and Joe McCarthy of Publicis (representing the buy side) all gave such rah-rah commentary on the state of the industry in general and their specific businesses in particular I thought I was at Ad Tech 1999, not 2009. All 4 players talked up the need for relevant, trusted, and valuable content (especially video) along with better measurement tools to see advertising dollars continue to make their way online.
MTV's Everson said her company is seeing strong ad sales growth from retail, studios, games, and auto (yes, auto). AOL's Levick mentioned auto (yes, auto) and cpg as 2 of their hotter categories. And Comcast's Banse touted entertainment and local as strong areas for sales improvement.
Unfortunately it was hard to appreciate Levick's bullish comments as AOL's Q3 earnings came out the very next day and it was not the rosy picture he was painting. Let's look at the stats:
- 18% drop in year over year ad revenue from $507MM in Q3 '08 to $415MM in Q3 '09
- 21% drop in ad revenue on AOL's own sites (including display and search) $288MM
- 12% drop in ad revenue from 3rd party ads sold through it's network to $127MM
On Thursday Jonathan Miller, CEO Digital Media Group of New Corp gave the keynote interview (by Drew Ianni), one day after News Corp's own disappointing news:
- 26% drop in digital revenue from Q2 to Q3 '09 (due to lower search and display ad revenue, the ongoing economic downturn, and much transition going on at the digital unit).
I was a bit surprised that Ianni failed to ask even one question about the earnings report during the interview. Meanwhile Miller projected double-digit online ad growth in '10. Let's hope the reality of online ad revenues in 2010 match up to the hype heard at Ad Tech last week.
