How will the credit crunch affect the web industry?

You would have to be living under a rock or with a remote tribe along the Amazon river to not hear and see the effects that the current economic downturn is having on businesses across the world. Whilst governments the world-over have made arrangements to prevent the global economy from sliding any further you can’t help but wonder how will this affect us all in the web industry?

When I first heard news of the credit crunch my initial thoughts were that of doom-mongering and having saved up a few quid in the bank I would be ok, right? Wrong. There is the constant concern about job security; if clients dry-up or our products don’t sell anywhere near the volume needed. There is also the issue of having access to my money should any of the banks I currently have accounts with collapse. The UK government has pledged to support the banks with a multi-billion pound bail-out strategy which should hopefully prevent anymore banks from toppling and therefore the economy from sliding further.

Sarah Parmenter has written a good article that discusses how the credit crunch might affect web designers. She has noticed that clients are taking longer to pay which can cause complications with cash flow, and she goes further to describe a client who requested FTP details to access their website so that they could make the changes themselves as a means of cutting costs. Further Richard MacManus over at ReadWriteWeb highlights a new report by Forrester Research which indicates a fall in price for collaborative and productivity web apps. So it’s not looking too rosy is it?

Well actually it’s not looking all that bad. In the forementioned article by Sarah Parmenter she mentions that online sales are up in comparison to last year suggesting either more customers are turning to e-commerce websites as a means of purchasing or that they are getting more frugal when purchasing. Typically online purchases are cheaper than a high street store due to the lower overheads. As Daniel Mcskelly suggests over on David Naylor’s blog, there are no better times to be in Search Engine Marketing than hard times and that a better, more quantifiable return on investment (ROI) can be achieved through search engine marketing.

So in summary, though we are in a hard and trying time, I feel that it is the businesses that strive to be innovative and market their products well that will see through the current economic downturn. Whilst businesses that bury their heads’ in the sand and ignore the situation will fail.

3 comments to “How will the credit crunch affect the web industry?”

Hey Scott,

Great article, thanks for posting the ping, it makes a really interesting read. Certainly troubled times ahead but I’m sure everyone will find new and inventive ways of beating the crunch.

Sarah x

Sarah Parmenter at 8.17 pm
on Monday 13th October 2008

What Sarah said :)

Good round up of the situation as a whole Scott. I think you absolutely hit the nail on the head - it’s those who can adapt and show clear value to their customers that will survive times like this. People & businesses aren’t going to stop spending, they’re just going to be a lot more circumspect what they spend on. Now more than ever if you can show great value for money you’ll do well.

Daniel Mcskelly at 8.53 pm
on Monday 13th October 2008

Funnily enough, these last few weeks we’ve had more enquiries for new sites and improvements to existing sites than we normally get in a month.

It seems that in these hard times more people are looking to expand or increase their current business onto the internet. Of course, a lot of the ideas aren’t really workable, there’s still an attitude of “get a cheap website, build it up and sell it for millions in two years” but it’s still nice to get all the new interest!

Keith Pointon at 11.59 am
on Friday 17th October 2008