Not surprisingly, the Internet is seen as the bright light in this ultimately mediocre forecast. While newspapers, magazines and radio advertising are expected to lose share, “Worldwide Internet ad spending will climb to $44.6 billion from about $36 billion, increasing its share of the market to 9.4% from 8.1%,” according to the ZenithOptimedia report.

What’s my take on all this? Selfishly, I’m glad I’m positioned in the online subset of the advertising economy. I’ve been bullish in this area for the past thirteen years. I suffered through the dot-bomb crash like everyone else, but the fundamentals won out and are stronger than ever. But I’m really not an Internet cheerleader or industry groupie; there’s something bigger going on.

It’s critical to view online advertising not as a safe haven, nor as an advertising subset with solid fundamentals. Online advertising must be viewed as transformative. Sure, online advertising is a bright spot, but it’s really a pervasive entrée to digital media ubiquity. It means all of our silo-plagued concepts of media categories — like Internet, newspaper, television, stuffed into this latest ZenithOptimedia report — will eventually connect and blur onto the digital grid. That will lead us to adopt models based less on media formats and audience proxies, and more on actual people, content, behaviors, receptivity, relationships and performance.

As that happens, the advertising economy will achieve unprecedented predictive, delivery, and interactive efficiencies. In other words, when most everything is online and connected, the fat and waste will begin to shed, making shrinkage of the total advertising pie a likely scenario. Even the early-stage, overseas advertising markets experiencing the fastest growth will inevitably mature and face this reality.

Oh, about those inevitable advertising cycles? Successive downturns will facilitate long-term advertising contraction by shifting dollars and expectations to those more accountable digital media. Advertising cycles will alter as a greater proportion of marketing dollars circulate back into product, experience, and customer-management functions.

How are you positioned for advertising contraction?
He also writes AttentionMax.com