Hasta La Creative!

The economic downturn has to hurt the ad business at some point. According to the Los Angeles Times, certain sectors-like online display advertising–are already feeling the pain.

In one ominous example, Lee Enterprises Inc., which owns 54 newspapers including the St. Louis Post-Dispatch, said in its most recent earnings report that its online ad revenue had dropped 9.1% while print ad revenue fell 10.1%.

Analysts say companies tend to cut back first on display advertising, which generated 21% of online ad revenue in 2007, because they see it as a way to improve their image rather than generate direct sales as search ads do.

Search-engine advertising, which constituted 41% of all online ad revenue last year, is expected to remain strong. Although, this Ad Age article about poaching trademarked search terms makes one question.

David Hallerman, an analyst with EMarketer Inc., figures online publishers have little to worry about. “Complaining about an online-ad slowdown is like griping about a slugger who is on pace for 40 home runs after hitting 50 last year,” he said.

Online advertising is “not going to grow as much as expected, but it’s still going to be growing more than other media,” Hallerman said.