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The housing bubble burst. People stop buying cars with cash-out refi money. Any company who was spending on advertising to support real estate, home furnishings, home building, mortgage products and autos, well, they're in a spot of trouble now.
So companies like Yahoo, Google, Tribune, Disney(ABC), Time Warner, etc are going to see ad spending dry up and dry up fast. Remind you of the dot-com collapse? Remember all the dot-com superbowl ads? Remember all the Ameriquest mortgage ads? Remember the "new homes" section of your Sunday paper?
Kaput.
I was looking at Advertising Age Top 100(pdf), and homebuilding/real estate/home furnishing sector advertisers account for 4 of the top 24 categories, Auto is #1 and Retail is #2. Add those three sectors up and it's $47.1 Billion in ad spending, or 32% of the total.
Yahoo is the first (of many) media companies to freak out the market.
Yahoo Sees Slower Auto, Finance Ads - Yahoo CFO Says Growth in Auto, Financial Advertising Slowing, Will Hurt Q3
Yahoo Inc.'s third-quarter results will be hurt by what appears to be a slowdown in the growth of auto and financial advertising, the Internet company's chief financial officer said Tuesday. Its stock fell 12 percent.
September 20, 2006
Housing meltdown ramification #3385: Ad-supported media to get clobbered (yahoo plummets)
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9 comments:
I expect a huge housing crash and ensuing recession, but I don't see why advertising will/is drying up. Aren't there more houses on the market that need to advertised? I do agree that RE agents may bulk at buying for advertising from their own pockets.
Although not very successful, I imagine that GM and F have not given up on selling vehicles.
Bill
when times are tight at companies the first thing to get cut is marketing budgets
take it from someone in corporate marketing
I keep wondering how long the 'Homes and Land' RE ad magazine will keep publishing. It is glossy, high quality and very expensive to publish. I've saved a couple for a bubble time capsule.
How ironic! Pretty soon all the Exec's willbe selling goldfish at Petco!
All correct - did you catch that item on Slate saying how Real Estate and Building CEO's were writing compensation packages for themselves that included "stop loss" agreements for their own homes - you acn't make this stuff up!
the thong, the thong....remove the thong and make a sale!
DO NOT BELIEVE THE HYPE:
1. Semel said this to sink the stock, which is already down, so they can buy it back.
2. The cold fact is that Yahoo is down because their PPC system sucks, and is constantly losing ground to Google. Don't believe me, check the adsense and PPC blogs -- none of us have had good experience with Yahoo.
3. While auto companies will cut their budgets, and soon, traditional print will suffer more than online, thus keeping online money about the same.
4. Housing and finance advertising however, will tank, as advertised, nyuk-nyuk.
Out with Yahoo, Google, and in with the street corner sign twirlers! I want to see a Yale MBA break dancing in his Brooks brothers suit while twirling an open house sign in 110 degree weather, that's entertainment.
Can you generate residual income with that? I'm learning the power of residual income for financial independence.
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