ChoiceStream

There’s a lot of depressing news out there about declines in ad spend and what that means for the future of online display advertising. Bear with me for a minute while I play devil’s advocate and look for a silver lining in the current economic quagmire.

Yes, ad spend is contracting during this painful recession. The forecasts are being revised downward across the board. But, for those of us in performance-driven advertising, this economic downturn spells opportunity, not disaster.

Today’s advertisers are understandably more focused on performance now than ever before. Every marketing program has to deliver immediate and measurable ROI or it doesn’t get funded. That’s why we’re seeing so many cuts in traditional online display spending. The ROI is difficult, if not impossible, to measure with confidence.

On the other hand, the ROI on performance-based advertising is relatively easy to determine. It works a little like search marketing in that advertisers pay only when their ads deliver results. But, it’s different in some key ways:

1. Performance-based display advertising has much greater reach than search marketing. Instead of reaching just the consumers who have typed certain keywords into a search box, advertisers can reach the millions of consumers exposed to display ads every second of every day.

2. Performance-based advertising focuses on sales conversions, not clicks. So, advertisers pay for ads based on actual revenue delivered, not just traffic to their site.

I’ve been in the online advertising business a long time, and I can tell you that advertisers spend money on programs that work. So, while we may see a decline in industry-wide ad sales numbers, advertisers will continue to spend on performance-driven ads; and, the better ROI those ads produce, the more advertisers will spend.