Yahoo boss warns of ad industry spiral

LONDON - Yahoo chief Jerry Yang has warned the ad industry is facing the worst economic downturn in decades, but insisted the online sector will emerge stronger from the slump.


Speaking at today's IAB Engage conference in London, Yang said: "We are looking at an extraordinary environment. The advertising industry has not seen an environment like this for decades."

But he said that consumers are still buying big brands and "engaging with brands". He said: "Internet advertising in a recession will come out better than when it went in."

Pointing out that during the original dot.com bust, companies such as as Yahoo and Google established themselves, Yang said: "I am sure the new companies of the future are being born now. These are times for opportunity, to build infrastructure and the tools to come out at the other end."

He also called on advertisers to continue to spend through the downturn, adding that "most of them will want to come back with a share of voice. They will need to drive stimulus and consumption when economy hits a certain level".

Among several key themes facing the industry, Yang pointed to internet advertising, such as search marketing, gaining importance. He said: "Performance-based advertising is very important to driving direct response. Search and lead generation continue to be a growing area for all of us."

However, Yang declined to comment on Yahoo's own recent travails, notably its rejection of Microsoft's takeover advances this year. Last week, Yahoo's bid to generate millions of dollars by allowing Google to sell search ads on its listings pages was ended when Google pulled out.

Source: mediaweek.co.uk March