In the most recent IPA Bellwether survey, the IPA reduced its forecast for 2022 ad spend overall by 1.6%, while predicting another four years of slashed marketing budgets. The numbers paint a bleak future ahead, with nearly half of those surveyed admitting to a pessimistic outlook on the remainder of the year, as inflation soars and consumer spending declines.
With challenging times ahead, Lotame’s Mike Woosley gave some advice to advertisers, marketers, and publishers looking to plan for the future. Read an excerpt from New Digital Age below:
“The industry needs to move on from asking ‘how likely’ a recession is, to ‘how long?’ and ‘how deep?’ it will be. Recessions are identified after the fact, and every sign suggests that the UK is already waist-deep in decline. This is uncharted territory for the digital marketing industry, which was still in its adolescence when the 2008 recession hit and which remained robust during the pandemic. Will it fare as well in the coming recession? And how should marketers prepare?
Responses to the looming recession have been mixed among major players in media and advertising. Both Zenith and GroupM have acknowledged that growth in marketing and media spend is slowing down, but are still expecting growth of about 9% this year; exceeding inflation by 3%, shrugging off a 26% plunge in spend in Eastern Europe, and dismissing the impact of a lockdown-driven recession in China which contributes 20% to that global forecast.
Meanwhile, Snap’s CEO Evan Spiegel conceded that the company’s previous 20–25% Q2 forecast had been scrapped, and while he still expects to see growth, estimates have been revised “below the low end of our guidance range.”
Optimism is far lower outside the digital advertising world, especially in the UK, where inflation is forecast to peak above the US and eurozone and last for longer. The Financial Times has been in conversation with global companies, who are braced for a recession. The confidence of advertisers and marketers is predicated on their clientele still wanting to spend, and it’s not clear yet whether they will.
At Lotame, we have already seen softness in media for Q1 via signals from our global data marketplace, while Q2 hangs in the balance. It’s in our interest that prognosticators from GroupM and Zenith and their call for “slowing growth” are on the mark. We’ve seen some stability in Q2, and we’ll choose to read that as a sign that these optimists are correct. The predictions of solid growth against all that’s happening are brave — hopefully not dangerously so.”
Read Mike’s full piece here.