Forum Moderators: martinibuster
Some great posts in that thread, notably FearlessRick's prescient words:
1. We are most likely headed for a recession, not only in the US, but worldwide... Without going into long-winded explanations, the coming recession will most likely be long and deep.
Seems like the economic downturn is in your face and can't really be denied. In the U.S. they're talking about economic stimulus packages.
But is it touching the AdSense program yet?
If not, does anyone anticipate it will have an effect?
Another effect which is new is that the US dollar is not longer the only valuta in the international market. The euro is taking over because it is stronger and has seen less up and downswings in recent history. Even at the OPEC they are now talking about moving away from the dollar as the only accepted way of paying for their oil.
So in my opinion the economic recession will have the following effects on AdSense:
Traditional media types will see a slowdown in ad spend initially but I think online and a few other media types will actually benefit as companies reach out for more conversions to offset slugish sales.
The recession is going to be severe, when I see friends that are cops and teachers buying 600k houses with granite everything and there buying groceries with credit cards then you know somethings not quite right and this has happened since 2002.
The Recession could effect some sectors/countries.
At the same time, I read a post on yahoo news today that the U.S. Online Ad Market Expected To Double In Four Years :
This means adsense will probably grow as advertisers move online..?
His response was "I choose not to participate" lol.
I believe that slogan originated about a decade ago in the U.S. when there was a lot of recession talk and the owner of a billboard company put the slogan on one of his billboards.
Reporters and politicians seeking election love to build up gloom and doom. Sadly a lot of individuals seem to love to hear gloom and doom news and then repeat it constantly in their daily conversations. They can't wait for the next article or news story that "confirms" the world is on the brink of disaster.
The phrase "I choose not to participate" has come to basically mean, "If others want to constantly dwell on gloom and doom thoughts, go ahead, but count me out."
I agree with your accountant.
FarmBoy
Besides lowering the interest rates in banks, it will also cause the US dollar to weaken further. That is bad news for all of the foreigners who depend on AdSense as their main source of income.
If anyone wants to take a read of my blog, they can sticky me (yes, that's an unabashed plug).
As far as Adsense is concerned, the slowdown in new media will be less pronounced, as others here have mentioned. TV and newspaper advertising will be hurt most.
The overall "recession" in the US and worldwide may be quite a bit more severe than some here expect. The Great Depression was global and we are in a highly coupled, global environment.
Besides the rate cuts and incentives the administration and congress are considering, the US should also get out of Iraq, where we are wasting $$ billions every week.
Likewise, individuals should pull back on unnecessary spending, though that's going to contribute to the overall decline in the economy.
The good news is that everything, from gas to meat to clothing, will be cheaper a year from now. We should be pleased to avoid a complete economic collapse, cnsidering the massive credit expansion over the past 20 years and now the eventual reversal.
Good luck to all. It's going to be a bumpy ride down.
1) The effects will vary by sector and audience.
2) As others have pointed out, anticipated growth in online advertising (presumably through transfer of dollars from traditional media) may help to mask or soften the overall impact of a recession on AdWords/AdSense budgets.
In some sectors (such as travel), currency-exchange rates may have more impact than a recession. Still, things aren't as simple as "a bad currency exchange rate is bad for business." More Americans take cruises in Europe every year, despite a weakening dollar, and one could argue that the weak dollar is encouraging growth in that niche because Americans can "lock in" U.S.-dollar cruise fares, shore-excursion prices, etc. through early booking.
As far as AdSense is concerned, it's possible that a recession would lead to tighter management of ad expenditures (e.g., even more emphasis on tracking ROI, greater use of the site-exclusion filter, and less willingness to experiment with things like site-targeted CPM ads). In sectors or niches where advertisers are getting squeezed, publishers are likely to feel the pinch as advertisers try to reduce waste circulation and unproductive clicks.
For example, if "you" are happy with $4,000 a month, you should prepare yourself to live in a $2,000 a month environment - whether you like it or not.
Decreasing debt, decreasing expenses, increasing savings and frugality are standard, healthy responses to a recession.
I actually started to prepare for this recession back in 2004. I saw it coming from back then. Since then, I saved like a maniac, cut expenses, have zero debt and invested wisely (precious metals) and still, I'm not sure how well I am prepared for what I think will be a long, hard and viewpoint shattering recession.
Despite this recession, I believe I am in good field and will keep working, keep plugging away at it, trying to make a living, even if my income goes down by 75 percent.
The inflation figures we've been getting since the mid-80s are a lie. Everytime they threaten to shock the consumer, government changes the formula to make them more favorable, but it doesn't make them more true.
But one can talk about the supposed mitigating factors of a recession or the merits of a government incentive based bail-out, and macro-economic factors until they are blue in the face, - if one isn't taking steps in their own micro-economic world, then macro solutions and wishing isn't going to make it better.
What I'm saying, or recommending, is that everone needs to take personal responsibility for their own economic situation.
Sure there won't be a ripple effect? Those on the trailing end won't feel it as soon as those closest to where the rock fell.
How healthy is the advertising marketplace? Anybody feeling a little softness in the market?
How healthy is the advertising marketplace? Anybody feeling a little softness in the market?
I haven't seen any effects yet. AdSense is way up (normal for January), affiliate bookings are way up (also normal for January), and display ads haven't shown any softness yet. Still, the recession panic is pretty new--maybe we should call it "Subprime Mortgage Panic: The Sequel"--and it could be a little while before advertisers and their media buyers react to an economic turnturn. (Unfortunately, they'll lag in responding to the inevitable recovery, too.)
When do you think the first quarter of GNP declining will be?
One oftens hears that luxury and high end sales will suffer first and most, with a resulting decrease in advertising for these goods and services as businesses trim their budgets. But it 'taint necessarily so...
The richest sector in America feels the pinch of recession the least, and will keep buying. There's some evidence that bears this out in the luxury home market that has chugged along despite the real estate collapse of 2007. I think the same would bear true in other luxury sectors: travel ($1000/night and up), Rodeo-Drive-level merchandise, jewelry.
I'm watching the unemployment numbers. I believe that when one of the wage earners in the working mom/dad household gets laid off we'll see the biggest impact on spending. A possible -and very unofficial--indicator of this might be the daily value of a WallMart shopping cart. What I'm saying, is that Mr & Mrs Average Doe are pretty much just getting by, and when THEY loose income, thats when it really hits the fan. For how long, and to what degree (is there a degree measure of S hitting the fan?) is just a guess.
This recession may be a very deep one and of global scale, if it is driven by oil production not meeting the growing demand, which is what oil prices seem to indicate.
Essential services with good survival possibilities might be: basic insurance, utilities, education, health care, groceries,?
Recession sufferers: cell phone extras, entertainment (inc. games, travel, music, books, dining), real estate, computer add-ons, consumer electronics, hobby stuff,?
Probably always enduring no-matter-what: diets, ultra high-end luxury goods/services, self-improvement,?
The richest sector in America feels the pinch of recession the least, and will keep buying. There's some evidence that bears this out in the luxury home market that has chugged along despite the real estate collapse of 2007. I think the same would bear true in other luxury sectors: travel ($1000/night and up), Rodeo-Drive-level merchandise, jewelry.
I think there's a lot of truth in that. Just the other day, THE NEW YORK TIMES ran a story about the inadequate supply of high-end business and luxury hotels around the world, and the resulting upward pressure on hotel rates in those categories. And magazines like CONDE NAST TRAVELER and TRAVEL + LEISURE, which are filled with ads for "lifestyle" products like luxury cars and expensive watches, seem to be doing fine while middle-class or lower-end magazines like TRAVEL HOLIDAY and TRANSITIONS ABROAD have either gone out of business or shifted to the Web.
Recession sufferers: cell phone extras, entertainment
But, food, agricutlure and utilities should perform best.
The truth of the matter is that if we are in recession (probably are, as 5% unemployment would indicate such), we are in the early stages. This one could last a while and be very painful for small businesses in middle-upper niches, like specialty retail. Autos are already in the crapper, and keep a keen eye on the banks. They have more losses to report.
Whenever somebody tells you it's over. Don't believe them until at least the first quarter of 2009. I will probably be among the first to know when it's going to end. I've been following economics since I was 6. That's almost 50 years and I think I've gotten the hang of it.
