Jeffries & Co Pares Back Online Ad Expectations

If any more investment or research firms plan to lower their 2008 and 2009 forecasts for online ad spending, I don’t want to know about it.

Jeffries & Company today became the latest in a long string of firms to trim (albeit slightly) their expectations of the online ad market. Jeffries now declares the channel will grow to $50 billion (20 percent) in 2008, down from its earlier prediction of $52 billion (25 percent). Next year it expects the market to grow to $58 billion (16 percent), down from $61 billion (19 percent). The guesstimate assumes lower growth in display (14 percent in 2008 and 7 percent 2009).

Analysts Youssef Squali and Naved Kahn were taken aback by meetings with European marketing execss, “many of whom were in a pretty somber mood.”

With Germany and Spain in recession and the UK and France struggling, they say advertisers are delaying their ad plans. “We’ve heard of new inquiries down by as much as 30 percent,” they say. Additionally, Web development projects are frequently being put on hold.

Jeffries does name some areas of continued strength, and no surprises here either: Paid search, SEO and analytics are expected to retain marketers favor til the flood waters recede.