Credit crunch causes slowdown in ad spending

7th November 2007

The unstable financial market has led to a market research company to lower their US internet advertising spending forecast.

Reported in Forbes, eMarketer still expects the industry to remain healthy because of large businesses' vast ad budgets.

However they have lowered previous estimates of expenditure reaching $44 billion (£22 billion) in 2011 down to $42 billion.

The company's senior analyst David Hallerman claimed that the reassessment was because the weak US housing market has caused a slump in the credit market and a struggle for US automakers.

However one of the possible explanations for the slowdown, Mr Hallerman added, is that businesses are branching out in online marketing strategies. The popularity of email marketing, website improvements and word-of-mouth campaigns is increasing, which is not reflected in advertising spending estimates.

Reported in the Daily Telegraph, industry analyst Jeffrey Lindsay predicts that mobile phones with internet are the "largest potential opportunity" for online advertising.