Can We Estimate Growth During an Economic Crisis?

Yesterday at Web Club, some of the online advertising professionals in Romania expressed their views related to the growth that the Romania online advertising industry will experience during 2009. Their predictions can be noted in the message Victor Kapra posted on his blog. Vivi remarked on his blog that, during a crisis, business people restrain from making any predictions because present and future seem to be outside any mathematical model that we can apply in order to estimate any future outcome.

I have to agree with Vivi on this one, since, as I was mentioning in a comment on his blog, I experienced the same thing recently, working on a project focused on the auto industry. Auto News Europe published a while ago an article discussing about the current global economic crisis and its impact on the auto industry, interviewing the top executives from the biggest car manufacturers worldwide. Their reponses were:

Carlos Ghosn, Renault-Nissan CEO:* “We don’t know if we’re at the beginning of the end or the end of the beginning.”*

Sergio Marchionne, Fiat Group CEO:“There is a level of nervousness out there that I have never seen.”

Carl-Peter Forster, GM Europe President:* “Consumer confidence in Western European markets is as bad as it was in 1993.”*

Norbert Reithofer, BMW CEO:“In 22 years in the industry, it’s the first time I have seen something like this.”

Giles Michel, Citroen Head:“We do not know how big, how deep, how far this downturn will go.”

I assume it is clear that even top executives running multi billion Euro companies spanned across the whole world refrain from making any estimations related to the development of their industry. The main reason why they are so conservative in making any predictions is the fact that every industry in every country is heavily dependant on the global financial and economical infrastructure and the effects that the financial crisis can cause in any of these industries is highly uncertain.

However, I think it doesn’t hurt us to be optimistic when we predict the outcome of the Romanian online advertising in 2009. In the end, it might bring a bit more confidence that the industry is not so much haunted by the global financial crisis and advertising clients sure need this comfort. Who knows, maybe forced by their companies marketing budget cuts they will be looking at cheaper, but still high quality, marketing channels and the Internet is still out there, mostly unaffected by the crisis and still cheaper than most of the traditional media channels.

As I was mentioning yesterday in my post, the current global economic crisis might prove to be an opportunity for a lot of industries that can reposition themselves in the new context. The Romanian online advertising industry could pass through this crisis highly unaffected, preserving its high growth level as shown in the past couple of years. However, we will not know for sure until a few months of 2009 have already passed by.