In the current economic situation all forms of marketing have suffered a serious blow. The latest numbers suggest that while all marketing media has suffered under the strain of a recessed economy, online advertising growth in particular is softening.
Since the tech and dotcom busts of the 90′s online ad revenue has grown at a staggering pace. The decline of the housing and credit markets, however, has finally spilled over into all sectors. According to the most recent numbers published by the Interactive Advertising Bureau and PricewaterhouseCoopers, online advertising was sliced by 50%. With growth now at 10.6% it is evident that online ad sales have hit a plateau of $23.4 billion. Q4 sales reached $6.1 billion, showing only a small gain of 2.6%
This is the smallest fourth-quarter gain in seven years. The stunted expansion was caused primarily by bleak holiday retail sales and the strained budgets of the biggest advertisers. 51% of ad dollars were spent in the fourth-quarter season, and this is also the smallest percentage for Q4 sales since 2002.
It is clear that the economy has an immediate impact on ad sales; however, David Silverman of PricewaterCoopers suggested during a recent webinar that the growth of the online ad market, despite the softening economic situation, indicates the strength of online advertising as a viable marketing strategy.
This comes as a hard pill to swallow for investors who have seen 25% gains in recent years, thanks to advances in Web 2.0 that fueled a massive expansion in online ad revenue slip down to single digits.
In 2008, experts predicted the numbers of online advertising sales to remain static, however the more current estimates predict a decline for 2009. A slow, steady decline is expected this year. Dr. Kedrosky, an economist at the Global Hollywood Conference, warned about declines of nearly 10%, as traditional sources of ad sales go into a similar downward spiral.
Some more optimistic sources, such as Jeff Lanctot of Razorfish, say that a static 2009 would be the goal to strive toward, and many analysts have not given up hopes of small growth in the sector. Still, with the depressing numbers from the IAB, many research firms and analysts, like eMarketer, are lowering their expectations for 2009.
Some online advertisers have begun looking for more quantifiable sources of revenue. Search went up 4% in 2008, and performance based advertising grew 6%. This is a shift towards ad sources with more accountable revenue. Analysts expect this trend to continue throughout 2009, and expect this area to grow until the economy firms enough to encourage more entrepreneurial sources of online advertising again.
Display advertising has seen a large slump in sales since 2008, yet it still remains a firm 33% of online spending. Digital video advertising went from 1% to 3%, showing a dramatic increase, despite contributing such a small portion to online ad sales. As video compression techniques improve this area is expected to continue to see growth.
As newspapers continue to face extreme economic strain, classified advertising dropped a hefty $100 million, or about 2% from previous totals. From the industrial sectors the largest contributor, retail, had the biggest losses. Retail ad sales fell from 25% to 22% of spending dollars.
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We’ve all gone through times when we needed to make a quick buck. Here is a great way to earn some extra cash by fishing out junked operating system product keys.
Many computers today come preinstalled with an operating system and have the product key label stuck on the case somewhere. With the way our society generally acts, when a computer slows down and becomes too much trouble you just throw it out and get a new one. I’ve seen piles of computers in local junk yards, scrap yards, and on the sidewalk during garbage collection day. The computers get junked and the product keys go to waste.
Right now a legitimate copy of Windows XP 32 bit still costs $90 USD. You can find a good key on just about any junked computer you come across. You might even find Vista keys if you get lucky (I got 3 home keys in stock at the moment).
Here’s how you can make some cash with these babies:
1: Find yourself a product key on a junked computer (not a computer that is still in use!). You will find the product key on the outside of the case in most situations. Look for the key on the bottom, back, or sides of the computer. After writing down the product key (and noting exactly what OS and edition it goes with), scrape the label off the junked computer with a screw driver or a knife.
2: Make sure nobody can use it again. If you want to sell the key, it needs to be legit and not in use by anyone else. Open up the computer, find the hard drive (the hard drive looks like a metal book sized object, it will be labeled as HDD near the CD drives), and take it. You will have to destroy the hard drive or sell it with the product key. This ensures that someone else won’t stumble upon the hard drive and use the product key that you are going to sell.
3: Now there are a few things you can do with your new product key. Some of them require you get the OEM (system builder) discs for Windows. If you don’t have one you can either buy one (and use it over and over again for each new product key you find) or you can borrow a CD from someone you know that built their computer with the same edition of the key you have. You may even find someone that is just looking for a key and doesn’t need an install disc.
The problem with pirating and trying to sell it is if you get caught with the disc, you are screwed. If you have a legitimate windows disc the customer will trust you and retards that want to rape you sideways can’t say anything about it because you are using all legitimate software and keys.
A lot of the punks in the IT departments of American colleges build computers for the experience (or to just shlick their e-penis) and you can sell it to them for $20-$40 cheaper than what they could get for it online. There are also the idiots that just want a completely fresh install of windows or want to go back to XP (easy money). I’ve made hundreds selling these keys on the side at $60 a piece in just a couple of months. You will find your own market; there are plenty of people looking for a clean and legitimate OS product keys. If I went out looking for these things every trash day I would be made of cash by now…and probably be labeled as a hobo and arrested.
Just don’t do this every day.
Sirius XM satellite radio has buried itself in a pile of debt that the recently merged company is having a hard time digging itself out of. The company may be out of business by this time 2009 if it doesn’t make some drastic changes and increase its subscriber base.
It was only this past summer that the two big satellite radio companies merged into one, and since then the company has seen its troubles mount. Things are not looking good as the stock price drops to less than a dime. 247wallst.com has put Siruis XM on its Companies That Won’t Make It Through 2009 list. Here is an excerpt from the list.
Sirius XM (SIRI) has traded under $.10 down from a 52-week high of $3.89. Reuters has reported that “Sirius XM faces some $1.1 billion in debt in 2009. Of that, about $300 million comes due in February.” In the current credit environment, that probably won’t happen. There is a theory that falling car sales will undermine the sale of Sirius subscriptions. The company says that it does no better than break-even in the first year it gets a new customer though GM. But, a shrinking subscriber based is not good news for the satellite radio company’s future. Sirius will be out of business, perhaps before mid-year. Who picks up the pieces? The logical choices are a healthy car company like Toyota or a satellite firm like DirecTV.
You can get stock in the company for less than the price of a pack of gum, and there are no signs that point toward an increase in the stock price anytime soon. With over $1 billion in debt due in 2009 ($3.4 billion overall), Sirius XM hopes that refinancing and some help from lenders will help ease them through 2009. Some feel that this will not be enough for the company, that the overall debt will still hang over the organization like a thundercloud, preventing progress and discouraging stockholders.
Increasing Sirius XM’s costs is the luring and contracting of high profile talk show hosts. Howard Stern receives $100 million a year from Sirius XM. Many believe the company should drop these expensive hosts and become just about the music. I think sending away the high-profile hosts for competitors to pick up is a bad idea though, because it is likely that their listeners will follow and the subscriber base will collapse.
More woe stems from the American auto crisis. Most Sirius XM customers listen to satellite radio in their vehicles, and with GM, Ford, and Chrysler sales severely lacking, Sirius XM has seen its sales plummet as well. Sirius XM works with the American automakers to have their satellite radios pre-installed in some vehicles, meaning no car sales equals no radio sales. Other automakers from around the world have also seen their sales slow due to the weak economy.
Sirius XM has only seen a new subscriber growth of 8% this year, down from the 10% growth predictions. The company now predicts it will end the year with a 19.1 million subscriber base. Sirius itself has seen subscriber growth increase 38% in 2007 and 82% in 2006. The stats are not looking good for satellite radio.
Radio prices have decreased, and this may have a positive impact for the struggling company this holiday season. We may soon see Sirius XM drop new subscription prices from it’s current $12.95 per month in hopes to attract new users who are wary of spending their money during this economic turn down. I myself might pick one up if I only have to pay under $10 a month for commercial-free radio.
One way or another, satellite radio is sure to stay alive. If Sirius XM goes down the tubes, some other company is sure to take over the empty industry. It is a great technology with advantages over terrestrial radio and is sure to see success in the future, even if it is failing to see any right now.