JP Morgan's Imran Khan cut his 2008 and 2009 forecasts for online display ads in a research note today, predicting increasingly conservative marketers will shift dollars to search and performance-based advertising.
His new view: U.S. display ads will grow 14% in 2008 to $8.2 billion, down from his original forecast of 20% growth to $8.6 billion. Khan also dialed back predicted 2009 growth to 16% to $9.4 billion, down from 17% to $10 billion.
"As advertisers become more conservative with their ad spend, we think that the long-tail advertisers will shift toward performance-based advertising forms," he said. But even as dollars shift, search won't grow as fast as he once thought it might. Khan is calling for 27% growth in search advertising in 2008, down from an earlier prediction of 32%.
Khan joins a growing club of analysts that have revisited their online advertising predictions, in some cases multiple times, over the past year:
- August 27: Carat drops overall ad forecast, but raises online advertising outlook to 23.7% growth in 2008
- August 13: eMarketer
plans to drop "a few percentage points" off its March estimate of 22.7% growth - July 7: BMO Capital Markets cuts its 2008 U.S. forecast to 1.8% from 3.6%
- June 30: Zenith Optimedia cuts its U.S. ad forecast for the second time in three months
- May 30: Lehman drops 2008 U.S. online ad forecast from 24% growth to 23%
- March 19: eMarketer cuts its 2008 online ad forecast 6%
- September 14: Oppenheimer cuts 2008 U.S. online ad estimate 26% growth to 25%
