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November 04, 2008
Ad rates down, but forecasts look positive

Online ad rates may be dropping, but spending for online will buck the current media trend and continue to increase in 2009, according to several analysts.

The average price for an online ad dropped 11 percent in the third quarter, according to a report from the Rubicon Project. But lower rates don't necessarily mean the sky is falling, according to Rubicon CEO Frank Addante. "The speed of growth may be slowing down, but online advertising isn't dependent on rapid growth for survival," he told Wired.

According to Myers Publishing, despite lower prices, online spending in 2008 will total $24.6 billion, up 13.8 percent from last year. Myers' forecast for 2009 says spending will climb to $27.9 billion. JP Morgan analyst Imran Khan recently reduced his predictions for ad growth but agreed with Addante and said overall spending will continue to be on the rise in 2009, thanks in large part to search ads on Google and Yahoo.

It's a completely different story for TV, radio and print media, where major analysts have predicted that spending will decline in 2009, after all of those mediums experienced declines in 2008.

Meanwhile, marketers are divided on how to approach the coming year. A survey by the Association of National Advertisers found that 39 percent of marketers plan on spending more on marketing and advertising next year. One third said they would spend less, while 28 percent said they would spend the same amount.

Some publishers, on the other hand, are preparing for the absolute worst. "Anyone who isn’t prepared for ads to go down 40 percent is crazy," said Gawker publisher Nick Denton.

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