Watch Out Startups, Ad Spending is Falling and So is Your Sky

Actual dollars spent on advertising this year was sharply lower than the original estimates. This according to an analysis by Blackfriars Communications. Worse, the same story is true online.

Researchers had predicted that 10% of overall advertising spending this year would go online. Meanwhile, it ended up at 7% of budgets. Plus, the entire pie shrunk as well.

Meanwhile, in a separate report eMarketer said that Google is grabbing 25% of all online ad dollars. All of this spells trouble for ad-dependant startups.

Too many startup companies are banking their business plans on online advertising. Unfortunately for them, the marketers are pulling back just as the startups are getting up and running. Web 2.0 companies advertising on the backs of other startups continues to be rampant. In addition, marketers want to make buys on strong sites, which many of these startups aren't.

All of this is trouble. If you're a startup, now would be a good time to roll out your backup plan.