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Publicis’s Levy: Too Many Companies Chasing Too Few Dollars Online

Publicis chairman-CEO Maurice Levy believes that advertising budgets are not big enough to support the rapid expansion of online advertising services, and that the industry is approaching the hyper-inflated economics that led to the dot-bust in 2000. He says that too many companies are chasing too few dollars.

Speaking at the Monaco Media Forum over the weekend, Levy called Microsoft’s $240 million investment in Facebook “insane,” and said (via MediaPost and the Financial Times) that, “Far too many people are building plans based on advertising, and they may well be disappointed because there is not enough money for everyone.”

In particular, Levy pointed to the social networking craze, saying that Microsoft’s purchase of 1 percent of Facebook was unbalanced relative to the potential advertising value. He believes that the investments in online social networks have yet to be proven by practical ad models.

Levy did say, however, that he believes web advertising will continue to grow strongly - at the expense of other media - even in an economic slowdown.

Publicis purchased online advertising specialist Digitas for $1.3 billion earlier this year.