Cheerful Gloom From Mary Meeker

http://bits.blogs.nytimes.com/2008/11/05/cheerful-gloom-from-mary-meeker/

Over time, she said, advertising revenue grows and shrinks three times as fast as the gross domestic product. If G.D.P. is unchanged next year, which is Morgan Stanley’s current forecast, ad spending for all media will fall by 4 percent. And it gets worse fast. A 2 percent drop in G.D.P., for example, would bring a 10 percent reduction in ad spending.

For Internet advertising in particular, there isn’t enough data to have such a precise correlation. Ms. Meeker said that in the slowdown from 2000 to 2002, online advertising fell by 27 percent, although the Internet economy had been inflated by a bubble of venture-backed ad spending. This year, Internet ad spending trends are much closer to other forms of advertising.

Ms. Meeker didn’t specifically forecast what will happen to online ads. “Display advertising will continue to be challenged, but search will do better.”