How an economic recession will impact digital advertising

By October 3, 2022 No Comments

As a digital advertiser, you may be wondering how the looming recession will impact your business. In this article, I will outline some of the ways in which a recession could affect digital advertising. Keep in mind that these are just predictions, and things could always change depending on the severity and length of the recession.

CPMs will drop

One of the most immediate ways in which a recession will impact digital advertising is through CPMs. As businesses start to feel the pinch of a recession, they will be more hesitant to spend money on advertising. This could lead to a decrease in demand for digital advertising, and as a result, CPMs could drop. If you’re selling digital advertising, this could lead to a decrease in revenue.

Platforms will accelerate new product features

In order to offset any potential decrease in advertising spend, platforms like Google and Facebook will likely accelerate the rollout of new product features that are designed to attract advertisers. This could include new ad formats, reporting features, or targeting options. As a digital advertiser, you should keep an eye out for these new features and test them out to see if they can help you reach your advertising goals.

Competitors dropping out of the marketplace, improving your retargeting

During a recession, some businesses will be forced to cut back on their advertising spend. This could lead to your competitors dropping out of the digital advertising marketplace, which could improve your retargeting efforts. With fewer competitors bidding on the same keywords and audiences, you may be able to get your ad in front of users at a lower cost.

Consumer budgets tightening up

As consumers start to feel the effects of a recession, their budgets will tighten up. This could lead to a shift in focus from brand building to short-term ROI. As a digital advertiser, you should make sure that your campaigns are focused on generating a return for your business. This could mean tweaking your ad copy or targeting to make sure that you’re reaching the right people with your message.

More sales and promotions from brands

In order to attract consumers who are cutting back on their spending, brands will likely increase the number of sales and promotions that they offer. As a digital advertiser, you should take advantage of these deals and promotions by promoting them in your ads. This could help you generate more clicks and conversions from budget-conscious consumers.

The digital advertising landscape is constantly changing, and a recession could be the catalyst for some major changes. By staying up-to-date on the latest trends and developments, you can ensure that your digital advertising campaigns are able to weather any economic storm.

Chase Sagum

Chase Sagum

CEO of Sagum