If you just look at the data, it paints a very grim future for marketing… at least in the short run.
Especially on the advertising front.
They also stated that their Q4 revenue, which mainly comes from advertising, is lower than most predicted with a range of $30 to $32.5 billion.
Nonetheless, no matter what platform you look at, it’s safe to say that the advertising industry is seeing a slowdown.
Now let’s dive into the obvious bad news, and then we will get into the silver lining and how you should adapt. Because there is hope and you can still do well in this market.
And when you have the S&P 500 down 18.67% it means companies have lost a lot of money… and I mean a lot.
Just think of it this way, the companies in the S&P 500 have a market capitalization of 30.12 trillion dollars.
In December of 2021, the S&P 500 had a market capitalization of 40.36 trillion dollars. That’s roughly a 10 trillion dollar loss.
To put it in perspective, if Apple, Amazon, Google, Facebook, and Microsoft didn’t exist that would only be 6.8 trillion dollars (based on today’s stock price).
When the market goes down, the value of which companies are worth goes down, which means companies cut back on spending. Marketing happens to be the first thing that gets cut in a bad economy.
Here’s what’s interesting…
Plus we have offices and employees throughout the world such as in Canada, Brazil, Germany, India, Australia, etc… because we work with companies in multiple regions and help them with their global and local marketing campaigns.
That in combination with working closely with some of the big advertising platforms and having tools like Ubersuggest that tracks millions of domains we really see a lot of data and trends.
Here are the 3 main trends we are seeing (keep in mind the data below is from what we can see and track, as we don’t have data on the whole web or even a large fraction of it):
Overall, the global costs for ads have been going down by 4%. Some industries like real estate have gone down much more, but with other industries like B2B SaaS, we haven’t seen much of a change with our clients as they optimize for lifetime value.
A lot of this is because businesses are cutting back on their spending in addition to many sectors such as real estate not having the same demand that they had a year ago.
We aren’t seeing conversion rates as high as they used to be. We’ve seen a drop of 7.13%.
Keep in mind that different websites have different conversion goals. Such as one website may focus on leads while another may focus on a signup or another may focus on a purchase.
Conversion rates are also affected by many other factors such as companies increasing prices due to inflation costs, shipping costs, and supply chain delays.
Or conversion rates being lower because some people aren’t spending as much because they may have lost their job.
We are seeing some companies pulling back on their total marketing budget because they are afraid of what lies ahead.
But we are also seeing companies shift their budget to digital marketing because it is easier to track than let’s say traditional TV or radio advertising.
Now we don’t manage traditional budgets for our clients, but we handle the digital side. In a good or a bad economy, companies tend to spend on digital marketing (things like SEO, paid ads, email marketing, social media, etc) as long as it is profitable.
As I mentioned earlier, we see a lot of data.
There’s a pattern that we have seen with the companies that have been growing this year (the ones we work with at least).
And to be clear, when I say growing, I mean companies that are generating more revenue and profit.
These companies are also taking advantage of the current economic climate to double down on their whole business, not just marketing, to gain more market share.
So, what are these growing companies doing in this economy?
Just because the economy isn’t where you want it to be, it doesn’t mean you can’t grow.
And if you really have headwinds ahead of you such as the mortgage industry, you can still make a lot of changes that will put the company in a much better place when the economy starts to recover.
In other words, start thinking outside the box. Don’t focus all of your energy on the news… sure it’s smart for you to stay up to date with what is happening, but the majority of your time should be spent on solutions and new ways to grow.
So, what are you seeing in this economy?
