It's not all doom and gloom! Advertisers are turning to online to remedy tightening traditional media budgets, and with the right formula most online marketers should be adept at bucking the downturn successfully.

With a turbulent economic climate in which even banks are too afraid to lend to each other and businesses are finding it harder to secure credit, it is no wonder that companies are questioning marketing and advertising budgets. But what does the credit crunch mean for online marketing?

Paradoxically, the credit squeeze is the online industry's opportunity to shine as budget cuts instantly lead to companies scrutinising their advertising return on investment. As many will remember from the last downturn in the late 90s, maintaining intensive marketing spend and focusing on performance and branding while competitors cut back inevitably helps to increase market share.

Despite the pervading sense of gloom being stoked up by the media, a closer examination of the evidence actually paints a more positive picture. True, the latest Bellwether report predicts the biggest fall in advertising budget for two years. However, internet advertising spend is set to increase by nine per cent and is the biggest rise of any advertising spend category.

Moreover, 2007 was another boom year for the internet in the U.K. The growth of the internet is continuing at breakneck speed, thanks to faster broadband connections and greater penetration, and the web is increasingly seen as the best medium through which to reach targeted audiences quickly and effectively. According to eMarketer, in the U.K. in 2007 an incredible 37 million people, over 60 per cent of the population, went online each month. This year is likely to follow this pattern, with estimates that the internet will reach a staggering 70 per cent of the U.K. population by 2012.

For marketers, this means that online advertising will be reaching an ever growing audience and an increasingly varied demographic. Not only is online advertising proven to hit the notoriously hard to reach young male market, but the continued expansion and diversity of information on the web means that marketers are increasingly able to target women and silver surfers.

So, while marketers may be assured that online is the most reliable way to reach a large target audience, with marketing budgets tightening, every penny of spend needs to be focused on the most effective channels and performance is key. Coming to the rescue of cautious marketers are advertising networks that work on a pay for performance basis, taking the risk away from marketers and providing thrifty budgeters with an economic safety net and better returns.

Advances in behavioural targeting technology mean companies are able to reach specific audiences online, without wasting impressions on a scattergun approach. This provides advertisers with higher guarantees of return on investment and a less risky approach to consumer contact, ensuring that performance can be closely monitored. Furthermore, customer experience is enhanced by ensuring that internet users are viewing service and product offers that are relevant and of interest to them.

Branding is another important focus for marketers in a period of economic recession. Economic downturn does not stop people from buying; it simply encourages them to buy more astutely. Customers will turn to brands that they trust and have frequent contact with. Targeted online advertising that puts relevant content in front of interested audiences.

So, in times of economic uncertainty, when consumers are feeling shaky, it is imperative that companies build and maintain trust using communications channels with the most impact at the right cost. Online advertising networks that specialise in measurability and accountability will continue to drive sector growth as they establish themselves as the marketer's faithful companion. The media and online channels that cannot display their return on investment will disappoint marketers and ultimately lose out.

Brendan Condon is managing director, Advertising.com International.