Are Google and online advertising vulnerable to a recession?
As the U.S. moves into a possible economic slowdown, partially caused by the subprime mortgage meltdown, the question is whether the pain will spread to online advertising. Online ads have been booming since the dot-com bust ended around 2003, with 20%+ growth every year. When recession questions arose recently, many analysts believed online advertising would remain “recession-proof” because it’s relatively cheap compared to TV or newspaper ads, and because it’s easier to track. The king of paid-search ads, Google, offered a similar rationale for why it would weather an economic storm, but now comScore found that clicks on Google ads have dropped the past two months. Google’s once high-flying stock has been hammered, from a high last November of $740 to around $470 today. Do you think online advertising and/or Google would get hit by a recession or will it survive a larger economic hit? Do you find yourself clicking on less Google ads and buying less online? Share your thoughts in the comments below and I’ll run the best ones in the next Your Take Roundup.
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