JPMorgan: Trouble in Online Ad-Land

Adding some data to the current debate about what happened to online ads in December — bears say the advertising floor fell out like a baddie’s elevator in a James Bond movie — here is what what one ad-industry CEO said during a JPMorgan conference call today:

  • Client online-ad budgets held up through the end of the year, contrary to the gloom-and-doom
  • However, consumers dropped the ball, with considerably fewer than expected searches conducted in the last two weeks of December. The upshot: Less saleable inventory for ads than expected, which may play into upcoming Google results.

Overall, I would characterize the JPMorgan call as mildly negative for online ads. And, for what it’s worth, this is a more concerning data point than purported spending declines by U.S. mortgage vendors like Countrywide, et al.


  1. The plural of anecdote is not data, but here’s one story: I run a network of websites and we display ~60 million AdSense ads/month on it (mixed up with other ad networks and direct sales). We saw our AdSense eCPM rate plummet 50% in December. Our other ad networks declined 30%-ish.
    I’d short Google’s stock in a heartbeat.

  2. The cost of buying real estate terms on Google’s adwords has exploded to the point that at this point it is mostly just dumb money chasing after placements on the top spots. Many of the long time national advertisers that with sophisticated systems for calculating ROI have started pulling back. Google revenue stream from US advertisers will flatten out sooner rather than later (and maybe it already has according to the previous post)