The key to ad buying in a recession is to spend efficiently. Here's how vertical ad networks can help make that happen.

These past few weeks there has been a lot of talk about the changes happening with the world's financial markets. In January 2008, the NASDAQ bounced around, falling 317 points (12 percent), and even the venerable Google, the bellwether of online advertising stocks, fell from 685 to 584, an almost 15 percent loss. Tuning in to the evening news, you can hear talk of the R word (recession), and Google Zeitgeist reports a huge jump in that term's search popularity in 2008.

Of course it's still very early to say what will happen to the global economy, and we probably won't know that we're in a real recession until we've been in one for several months, but this current financial situation actually offers great opportunities for savvy advertisers. Compared to previous recessions, the key difference today is the opportunity to leverage the long tail of the internet to maximize the impact of advertising campaigns and reach target customers who spend more and more time on more and more sites.

Some marketers are already taking advantage of less competitive marketers to grab share and increase brand awareness.

Wal-Mart, for example, has launched a series of price roll-backs coinciding with a major TV campaign, "Save Money, Live Better," highlighting Wal-Mart's evidence that it can save the average family more than $2,500 per year -- a position that should increase sales and brand equity. Imagine the increased impact if Wal-Mart delivers this message as well through the internet to communities of quality sites focused on moms, bargain hunting or even family finances (Mom*Logic, iVillage Parenting, BlogHer). These vertical-oriented networks could offer Wal-Mart increased reach, greater share of voice, and engagement with the thought leaders trusted by their target consumers. 

Adweek reported that Sizzler is launching a campaign to re-brand its restaurant chain as young and hip. Sizzler is creating viral videos that feature actors and actual consumers and are aimed at both entertaining and driving home Sizzler's value as "Where America comes to eat." Sizzler is taking advantage of this time and the appetite for entertaining online video to reach new, young consumers who would not admit to going to Sizzler. The video spots will initially break as paid media on MySpace and Facebook, although Sizzler can extend this impact by placing its video spots on focused video networks targeting young men and entertainment-oriented consumers (Break, Clearspring Widget Network, MaximOnline and PeerFlix).

The long-tail opportunity/dilemma
The challenge of reaching your target audience and ensuring that your brand is elevated in the process is very serious as consumers split their time among more and more websites and entertainment outlets. A comScore report shows that only 36 percent of users' online time is on the top 20 sites: a 4 percent decrease in just one year. Brand lift depends on message, creative, reach, frequency and placement. Advertisers must control their message and creative and look to partners that deliver reach, frequency and placement.

For brand advertising campaigns, placement is paramount. Brand engagement studies are showing that the impact of placing advertisements on the quality long-tail site exceeds the impact of broader sites because consumers are favorable to the advertisers who support their favorite niche sites. If you can reach your target consumer at the time he is most interested in your brand, your brand lifts significantly.

According to research released in January 2007 from Media-Screen, brand managers and media planners need to engage with smaller sites with less traffic. Media-Screen's "Netpop | Response" study found that these premium quality smaller sites are indispensable to consumers -- and they provide a new way for brands to position ads where users want to see them.

Interest in the products and brands advertised on smaller sites is greater than on larger sites: According to the eMarketer "Bigger Sites May Not Be Better for Online Advertisers" study, 42 percent of sites with less than one million unique visitors a month advertise products of interest to their viewers, vs. 39 percent of sites with more than one million visitors.

Why spend?
Why should you increase advertising in an economic down cycle? Several decades of research on advertising spending tells us that, while the typical response is to cut back on ad spending when the economy slows down, advertisers with strong brands, stable budgets and compelling value propositions can use this time to surge ahead of their weaker competitors, especially when targeting that advertising effectively. Professors Raji Srinivasan, Arvind Rangaswamy and Gary Lilien published research on this phenomenon in 2005 in the International Journal of Research in Marketing.

Examples of advertisers who used a downturn to their advantage include Revlon and Philip Morris, who gained market share from increased ad spending during the U.S. economic recession of the mid-1970s, while Avon and Hershey suffered from ad cutbacks. Studies from as far back as the 1940s, '50s and '60s show that advertisers who cut spending had decreased sales and profits that extended beyond the recession itself.

During the 2003 down cycle in online advertising, Hallmark Flowers ran a campaign on Weather.com that delivered a 33 percent lift in unaided brand awareness, more than double the "MarketNorms" for that metric according to Dynamic Logic. The other three branding metrics studied also gained substantially higher lifts than the online norms in a survey of almost 2,000 Weather.com visitors.

Advertisers who can keep spending when times get tough get better value for their advertising budgets than in high-spend times, and they get their message and value proposition across to consumers who are ready to spend when the upward cycle begins again, as it always does. However, the point is to spend as efficiently as possible, where the long tail of quality smaller sites on vertical networks offer reach, frequency control and premium placement that is a necessary for competitive, creative and winning online advertisers in 2008.

Russ Fradin is CEO, Adify.