- Jim Edwards

It's always sunny on the internet: A straw poll of Web media buyers, providers and analysts conducted by Brandweek as the stock market entered a second week of free fall indicates that ad spending on the Web for the third and fourth quarters of 2008 will likely emerge relatively unscathed.

The Interactive Advertising Bureau reported last week that spend flattened in the second quarter of 2008, but remained on course for another record year, with total spend 15.2% greater than this time last year, at $11.5 billion.

The reason: Marketers are pulling their dollars out of traditional media such as newspapers and broadcast, and reallocating them to the Internet, where results can be measured better. Thus total ad spend may decline, but the money that remains is being switched onto the Web, resulting in increased revenues in that media.

The fourth quarter will likely be wobblier, execs say. Marketers are reallocating dollars as they try to figure out whether their budgets will be affected by the credit market collapse. Another unpredictable variable is consumer confidence going into the holiday season.

"There's a huge question mark right now starting in October," said Matt Wise, CEO of Q Interactive, a Chicago Web-marketing agency. "It's definitely not bullish. [Agencies are telling him] the money's here, we just need to have 'final approval' from clients."

The health of the Web, and the feeble condition of traditional media, was writ large at the MIXX Web marketing conference in New York late last month, when Chrysler CMO Deborah Wahl Meyer told attendees, "That idea of bombarding consumers with GRPs to build top-of-mind awareness is, we think, a big waste of marketing dollars. The consumer process increasingly starts with a search engine. It's accurate to say that 'awareness' is overrated."

Chrysler's ad spend this year has fallen by 7.8% but up online by 41%, said David Hallerman, senior analyst at eMarketer in New York, who based his analysis on numbers from TNS Media Intelligence.

In a parallel move, General Motors announced a few days earlier that it would not advertise in next year's Super Bowl broadcast. That money will likely end up on the Web, analysts say. GM's budget is down overall by 8.7% but up online by 79%, Hallerman said.

"If a company was taking $100,000 out of newspapers or radio, media that are suffering, they'll be adding $25,000 to the Internet. [That's a decline in budget] but it's still $25,000 the Internet didn't have before," said Hallerman. He noted a basket of companies whose traditional spend was flat or shrinking while Web spend rocketed: S.C. Johnson was down 9.6% overall, but online was up 111%. Wells Fargo is down overall by 9.6%, but up online by 157%. Verizon is up overall by 8% and up online by 70%. Ford is down overall by 2% but up online by 65%.

The big-spending categories whose online budgets are still rising include resorts and hotels, up 81%; colleges, up 68%; and video games, up 47%.

The Web's skies aren't completely blue, however. Q Interactive's Wise noticed one potentially ominous cloud on the horizon: The economic slowdown began in 2007, which triggered the flattened spend in the first half of 2008. If Web ads are a lagging indicator, he said, then the open question is, "Will it drop further and did the marketers mark down their budgets appropriately?"