Digital is in fighting shape but will not be immune to challenges in 2009.

Ludicrous levels of over-investment in a market without solid foundations prompted a catastrophic crash with widespread job losses in the sector.

This is not a snapshot of the current economic situation, but a flashback to the spring of 2000 when the online bubble burst and the dot.com world fell to its knees.

The digital market-place has made some serious strides since those dark days and if the UK economy recovers to such an extent that the online media world has done over the past nine years, then we should all remain highly confident that the economy in the UK can return to a model of progressive and sustainable growth.

With online ad revenue growth expected to reach 7-9% in 2009, online media consumption and e-commerce levels at an all time high and marketers increasingly turning to digital to deliver results, the online media industry looks well placed to establish itself even further up the marketing food chain over the next 18 months.

As more companies adopt the "change or die" response to the downturn, the media landscape will see some radical changes in 2009. Online will not be immune to the cold winds of the credit crunch, with the actual rate of spend growth down on recent years, but in comparison to other media channels and in terms of market share, digital will be the principal benefactor in 2009.

However, if we dig a little deeper, there will be some serious challenges in 2009 for digital media owners who have been performing well over the past 18 months - most notably in the display sector.

First and foremost, deflation can be expected in online pricing in 2009. Site inventory levels will be higher than they have ever been as consumers spend longer online and despite growth in advertiser demand, it will not outstrip potential supply. The importance of technology to better optimise and target inventory will be absolutely critical for defining who succeeds and who will possibly fall by the wayside in the display sector. With the "Big 3" Portal groups – Microsoft, AOL (Platform-A) and Yahoo aggregating their various media and technology assets in to three single buying points, this will put some serious pressure on the low to mid sized display media owners unable to offer the range, rates, technology and service economies of scale.

Within the "Big 3" portals, there could be some significant differences in performance. All three still have work to do and it's hard to see Microsoft, Platform-A and Yahoo all meeting their 20% growth targets. Microsoft's behavioural technology requires further development, Platform-A's AOL portal appears in terminal decline and Yahoo's investment in their network last year meant it struggled to deliver performance. That said, these organisations are not digital novices! Platform-A can still deliver scale without a home grown audience. Yahoo! is incorporating sophisticated data techniques into its targeting, whilst Microsoft can throw cheaper rates and a growing audience at the problem. The key to success will be for the big guns to provide the commercial effectiveness and value for clients without any compromise to audience targeting, innovation and creative potential. If they achieve this, we expect to see further streamlining in the display sales marketplace. And notice, Google has not even been mentioned yet! But make no mistake they are mobilising in display - with more resource being applied to their display network and finally, some new ad formats for You Tube. It is early days for the latter. The lack of segmentation in the way the ads are being sold on You Tube renders it is an expensive media buy; but that will evolve and as soon as PPC bidding is applied to video on You Tube we can expect a rapid turnaround in You Tube's display fortunes.

While Google continues to outpace the market, Facebook will have no difficulty selling its targeted advertising product in 2009 but will need to innovate further or risk advertisers' deflecting spend in to other social media opportunities such as Twitter when they work out how to monetise their growing user base. An important opportunity for the display market as a whole is to incorporate the influence of display advertising on acquisition channels like PPC within their proposition to ensure they are better represented when campaign performance is being analysed. The Paid Search market has benefitted enormously from the world of last-click reporting but it does not paint a true picture of the wider online media mix and over the course of 2009, we expect more online advertisers to advance away from this model – which will be to the benefit of the display media owners.

And finally, it is not all doom and gloom for the traditional media owners. Dennis Woodside at Google talks of the importance of a Darwinian approach to media in today's challenging market place where those who survive will be those who evolve the fastest. For the offline world, this means seriously radical change in the way they operate their businesses and the content they create. Digital cannot exist in isolation. It relies on offline media to generate interest and so more widespread creation of cross media opportunities that represent value and innovative ways of engaging with audience will be critical to those media owners who were born in an offline format. In fact, they should make a conscious effort to remove the words traditional and offline from the vocabulary of their sales teams in 2009.