Will the Subprime Meltdown Hurt the Ad Industry?

by mtippett | August 20, 2007 at 09:32 pm

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I remember being told by various Madison Avenue types that Capital One sends out over 1 billion pieces of direct mail a year. I'm pretty sure I've got most of those. They truly are one of the biggest snailmail spammers around. They are also a HUGE source of advertising dollars for the direct mail business. The news of their latest layoff and cost cutting is bound to hurt the ad business. According to Reuters:

NEW YORK (Reuters) - The U.S. mortgage industry took another battering on Monday, as Capital One Financial Corp said it will shut a lending unit it bought less than a year ago, while two mortgage companies took steps to bolster liquidity as losses piled up.

Capital One, best known as a credit card issuer, said it will cut 1,900 jobs and take $860 million in charges as it closes its GreenPoint Mortgage unit, which it acquired last December when it paid $13.2 billion for North Fork Bancorp Inc.

It remains to be seen how this will play out in web advertising dollars. Time will tell.