What Mortgage Crisis? Financial Ads Keep Pouring Online.

From Silicon Alley Insider: We've argued that the mortgage crisis is likely to trigger a slowdown in online ads that could have ugly repercussions. One of the many counter-arguments is that even as the home loan business blows up, both mortgage companies and other financial advertisers will continue to pour money into web advertising -- because they need to keep lending money and because it's cheaper to attract customers online than anywhere else.

Well, a new report from Nielsen/NetRatings on U.S. Web advertising appears to support the more sanguine thesis. In July, four mortgage/financial advertisers showed up on Nielsen's list of the top 10 Web advertisers (PDF). All four show up in the August list released today, and three of the four increased their ad budgets -- including imploding Countrywide Financial, which increased its ad spend from $34.8 million to $35.4 million. 

So are we wrong about the risk the mortgage crisis represents for the Web advertising business? We hope so. But we're not abandoning the gloomy thesis just yet.  Countrywide's implosion did not begin until mid-August, when Merrill Lynch downgraded the stock to SELL and Countrywide sucked down an emergency $11.5 billion on its credit lines.  (And it wasn't until last week that the company began firing employees). The month-to-month rate of growth of Countrywide's online ads (per Nielsen) slowed in August, with a $30 to $35 million jump from June to July, which could be the first sign of a change in trend.  Lastly, we continue to worry less about what has happened than about what is yet to come.  But all that said, Nielsen's August report certainly did not provide additional cause for alarm.

Related:
Will Mortgage Woes Spread To Online Ads?
Will The Mortgage Crisis Hurt Web Ads? Looks That Way.
How Bad Could Mortgage Mess Get For GOOG, YHOO, RATE

Comments

[JonKelly]

I'm glad to see that you are coming around on this. As we noted last week, http://blog.surehits.com/2007/08/31/half-empty/ the Nielson numbers overstate the ad spend for mortgage advertisers. But, used as time series data, they provide a good relative measure. The mortgage crisis is real, but the outlook for big internet publishers is not nearly as dire as you have written.

[renthusiast]

all the negative press that sub-prime lenders, the mortgage industry and the housing market is having will probably have an overall effect on consumer confidence, especially in relation to housing and related financial products. Even if mortgage companies increase their ad spend, but nobody responds to the ads, this will no doubt force a rethink in their marketing and advertising strategy, which is likely to happen, it just hasn't started yet

[sarto]

think that the mortgage fallout is real and will be pronounced. i have been in mortgage lead gen for 5 years and know the #s. I estimate $25m per month of internet marketing expenditures has gone away.