MediaPost announced that Nielson Online’s AdRelevance service reported that mortgage ad spend had decreased in January. Along with their affiliate payout reduction Countrywide also cut their CPM (Cost Per Thousand) advertising spend. A couple of things that should be noted before I go any further. First, CPM advertising can include banner ads and some text ads but does not include email or PPC. Second, these Nielsen reports tend bounce around time to time, but I think these are not typical monthly adjustments.

Others dropped out of the top ten list and the report claims that mortgage related spend decreased by $12 million to $140 million.

That’s lower than it’s been since at least last June. In another sign of recent ad softness, consumer financial site Bankrate earlier this month missed fourth-quarter earnings expectations because of cancelled ad bookings caused by turmoil in the mortgage and financial sectors.

Because of the mortgage mess many have lowered online spend expectations.

Last September, Oppenheimer & Co. lowered its estimate for the Internet ad sector in 2008 by $447 million to $25.3 million because of expected cutbacks in mortgage-related ad spending. Of the $2.7 billion in financial services spending online, about $900 million comes from mortgage ads.

Of the total financial service spending online mortgage ads include 30% of that total, but over all spend in 2007 has been estimated to have been around $19.5 billion. That means mortgage ads represent only about 4% of the total ad spend online. This is why when I talk about mortgage ad spend and the fact that yes mortgage related ads are decreasing, but that doesn’t mean there are discounts out there. It doesn’t mean that advertising is any cheaper than it would be with the mortgage ad spend at its normal levels. Yes financial service companies are frequently at the top of online spend lists, but the top ten list include companies in the short tail and I believe that the majority of online spend is found in the middle to long tail of a chart.

Again, we have mentioned this before, but companies are decreasing their spend and reverting to cheaper strategies. Will this affect lead quality? Maybe for some companies it will. The companies that will be most affected are the companies that have specialized in expensive marketing strategies and may struggle correctly optimizing unfamiliar strategies.

However there is one important point to note, though. There are less buyers in the market today and the fact is that there is less demand and there is no longer a need for a large supply. The reduction in spend may only be a correction. Also, the article noted that not all mortgage related companies decreased their spend.

Comparison shopping site NexTag, which also provides mortgage leads, increased its online ad spend by $4.5 million to $65.5 in January. As such, it remained the number one online advertiser. Experian Group Ltd., which owns competing mortgage lead-gen site, meanwhile, doubled its ad dollars last month to $61 million.

This is interesting and contradictory to a number of news items in the last few months. Either way there has been alot of positioning going on in online world. What all comes of it we will have to wait and find out.