While companies are in the middle of budget season there are many discussions about how the impending recession is going to affect advertising budgets and how those budgets will be allocated. Many seem to believe that companies will simply decrease their total spend and shift the majority of their remaining budget to online programs, primarily PPC and banner ads.  Granted, different industries may address these changes differently but there is a trend in the thinking.

Perhaps you are facing a decision on how to use your advertising more budget more effectively.

Here are some questions to ask in preparation.

Why are companies preparing to shift more money to online marketing?
Online marketing campaigns are more directly measurable than tradition advertising channels. With layoffs looming many managers at all levels are going to need to prove there accomplishments with cold hard conversion numbers.

What does this mean for publishers?

In many ways the publishers have saturated themselves with tons of user generated content pages and excessive pagination to produce additional ad space. They have done this to meet demand, but if the demand for high price high visibility / specialty ad placement declines publishers are going to have to make some very quick changes.

For Big Business

1. Publishers may need to throttle back ad space inventory to match declining demand and keep specialty ad prices from falling too far. It will likely take time for them to accomplish this and in the meantime their will be affordable short terms placement available
2. Shift to more automated PPC ad networks – many publishers are going to follow the advertiser to these networks – this means changes to layouts to accommodate more text ads from Google, Quigo and the like.

For small  business/ bloggers

1. Potentially more advertisers and more return on your publishing efforts as contextual ad placement places decides where the money goes.

What does this mean for the advertiser?
If you are lucky enough to work for a company that understands that you need to advertise even in tough times, then you are about to have some new opportunities even with a tighter budget.

1. More affordable specialty ad space
2. Potentially lower prices on high end creative as demand for that also falls.

What does this mean for Google Yahoo and MSN?
If more companies move more money to directly measurable online ad programs, as many believe they will, such as Google Adwords, Google’s stock price is going to maintain its position. Or at least not fall too much further. Yahoo and MSN may see an improvement. This is going to place pressure on competitors selling the expensive high visibility space to create more robust tracking/measuring/auditing systems.

Look for a followup on using social media to drive traffic to your website.
An important option to consider whether your advertising budget is unaffected, decreasing or non existent.

Here are a some interesting links on the topic:
http://searchenginewatch.com/showPage.html?page=3631055

http://www.mediapost.com/publications/?fa=Articles.showArticleHomePage&art_aid=91858

 http://www.forbes.com/media/2008/10/01/media-magazines-newspapers-biz-media-cx_jb_1001brady.html