Advertising’s big engine slows

A global study by WPP Group’s GroupM unit and reported in today’s MediaDailyNews confirms something I’ve suspected for several months — that the boom in comparatively cheap internet advertising is slowing the growth of advertising overall.

…the rapid expansion of supply of online advertising opportunities is helping to satiate demand from marketers, keeping media price inflation in check for the overall advertising economy, especially in major markets such as the U.S. “At this late stage of the economic cycle one would normally expect media growth to have run well ahead of GDP as healthy profits finance excess demand for diminishing media reach,” the GroupM report says, noting, “One thing stopping this is the growth of the Internet in developed economies. Its audience is growing even faster than its incoming tide of advertiser money, so it is actually getting cheaper. At the same time it is attracting cash from the big but fragmenting and hence inherently inflationary media, whose valuable reach is in shortening supply.”
This, of course, leads one to ask what happens to media companies whose lifeblood is the GROWTH of advertising?

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