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The mortgage meltdown that’s wreaking havoc on the markets might have a ripple effect on companies whose livelihoods that depend on Internet advertising. Huh, you say? Well, check out this nugget of information from the most recent figures from Web tracking firm Nielsen//NetRatings. According to Nielsen, the fourth largest online advertiser during the month of July was the troubled mortgage lender Countrywide Financial (CFC). Nielsen estimates that Countrywide spent $34.8 million on Internet ads during July. Another mortgage-related company, information site Low Rate Source, was the top spender, buying $46.3 million worth of online ads. Could the problems in the subprime mortgage market wind up hurting companies like Google (GOOG), Yahoo (YHOO), Microsoft’s (MSFT) MSN and AOL, which is owned by my parent company Time Warner (TWX)? The credit crunch could, in theory, cause financial institutions to curtail their ad spending. And with Wall Street is openly debating the future of Countrywide — some have even speculated that it might need to declare bankruptcy — it wouldn’t be a huge shock if it had to drastically pull back on its spending. It seems that every penny counts at Countrywide these days. Sure, it’s unlikely that problems in one category will lead to a sizable, prolonged slowdown in online ad spending. But weakness in the mortgage business could have an effect on short-term results at the very least. Remember last year when Yahoo! stunned Wall Street with a revenue warning from out of the blue? Last September, the Internet media titan blamed softness in online ad spending mainly due to weakness in auto and financial services ad spending. Hmmm. Filed under online advertising
Posted by Paul R. La Monica 3:00 pm 7 Comments
 | Add a comment Don’t ‘they’ always say that the last budget you should drop is your advertising budget? Posted By Ryan, Burke, Va : August 18, 2007 10:15 am
I suppose they already paid for it, but across the street in Plano, TX, countrywide is building and upgrading in a major way to their newly purchased building. No lack of $$$$ seen there, for sure. Looks like a ton of hardware is going to be brought in or purchased too.. the cooling units they are putting in make for one huge data center. Posted By trannyguy, plano, tx : August 17, 2007 5:30 pm
Check out http://www.eyeoncountrywide.info, an independent consumer resource examining sub-prime lending and Countrywide Financial Corporation Posted By Molly New York, NY : August 17, 2007 8:56 am
Posted By Jack, Birmingham and Alabama : August 16, 2007 10:43 pm
Mortgage advertising has long been the bread and butter of not just Yahoo, AOL, and Google - but many other online ad networks as well. I think there will be a substantial slow down in the online spending of mortgage advertisers. Check out my site: http://www.bloggingsponsorships.com If you have a blog you can find sponsors for it! Posted By John Kover, Chicago IL : August 16, 2007 4:43 pm
Posted By Andrew Christiansen, Red Deer Alberta : August 16, 2007 3:17 pm
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The number quoted by Nielsen grossly inflates the actual monies paid by advertisers to Yahoo! No “anchor” sponsor like Countrywide pays rack rates (CPM) for banner ads or for slotting in the mortgage center. These deals are customized and at far lower CPM that the one used by Nielse. The drop in CW advertising, if any, should be negligible on Yahoo’s revenues.