Why pay-per-click advertising will continue to grow, despite the glut of supply…

Is online advertising, especially pay-per-click, headed for a downturn? Steve Rubel thinks so, giving five reasons why a pay-per-click recession looms. Forrester disagrees. So do I. The flaw in Steve’s logic is it doesn’t take into account the economic term of comparative advantage, which basically argues that different countries – or companies, in this case – will specialize in the areas where they maintain a competitive advantage relative to others. For instance, as Om Malik points out, Yahoo is making a bit of a comeback because it’s proving more efficient for some marketers and some campaigns. And as small businesses seek the advantages search marketing offers, “…there’s a huge potential selling online marketing and advertising…to small businesses.” Finally, remember that Google may not be able to sustain its growth; however, demand for measurable, effective marketing tools isn’t likely to fade anytime soon.