Headwinds for online advertising

From The Globe And Mail - The explosive growth of online advertising may slow somewhat because consumers are beginning to find some of its techniques intrusive, consulting firm Deloitte Touche Tohmatsu believes.

While many consumers find advertising annoying, Deloitte said there are signs they are taking a particular dislike to ads in the online world. It cited a survey last year of consumers in the United States that found the majority noticed print ads more than those online, but also found them less invasive.

People are also objecting to advertisers following their every move online, according to Deloitte. Perhaps the best demonstration of that came last month when Facebook pulled its Beacon ad program that tracked the purchases its members made online and then alerted their social networks.

A slowdown in online ads would be discouraging news for companies looking to expand beyond traditional advertising, as well as for the media companies and websites that rely on online ads for growth.

Nevertheless, Deloitte expects this segment of advertising will expand further in 2008. “Even if the growth of online advertising does slow in 2008, slower growth should be put in perspective. Online advertising is expected to generate tens of billions of dollars worth of revenues in 2008 from a relatively small, addressable market.” | Read full article