Expect the Credit Crunch to Hurt Internet Advertising

Authored by Scott Goldberg on August 30, 2007 - 5:12am.

The ripples of the subprime mortgage mess is expected to reach the internet advertising market, CNBC reported this morning. Mortgage Lenders are some of the biggest advertisers on the web, said correspondent Julia Boorstin. Overall $18 billion per year is spent on internet advertising, according to Oppenheimer & Co. Multimedia Intelligence. Of that, 16% comes from financial services companies ($2.6 billion in 2006).

The top 5 advertisers tied to lending in June, according to Oppenheimer:

1) Lending Tree (largest in June)

2) LowerMyBills.com

3) Countrywide Home Loans

4) Capital One

5) Bank of America

We won’t get a sense of how much lending advertisers will be cutting back until the end of the quarter, but given that so much is spent on interest-free loans and related ads, it’s safe to assume there will be an effect.

But the news for media advertising isn’t all bad: TV ad spending for the fall, according to CNBC, looks strong.

“This current ad spending period is showing double-digit percentage increases over the upfront ad sales period which just wrapped up,” said Boorstin. “One of the reasons advertisers are buying more is because these ratings points are being calculated based on regular viewership, plus 3 days of DVR. Advertisers are worried they may not be reaching as many viewers, but they’re buying more ads.”

Scott Goldberg