Agencies, brands feel the squeeze: Tech’s woes are just one small part of the ad industry’s overall downturn. Layoffs have hit several ad agencies, and major advertisers are starting to reel in spending.
- Automakers spent 23% less on advertising in June, according to iSpot. Ford suggested it may cut its entire electric vehicle ad spending budget. Microsoft also halted TV ad spending last month, citing inflation and interest rates.
- The job outlook in the US is positive overall, but advertising still shed 2,400 jobs in May. The downturn is continuing: Madwell recently laid off 10% of its workforce, Dentsu shed 30 employees, and influencer marketing-focused Jellysmack let 8% of its staff go, among others.
- Connected TVs have been a hotbed for ad spending recently, but their high cost and recent concerns about accuracy have led many marketers to put their money elsewhere.
It’s not all doom and gloom: An ad industry downturn isn’t just coming—it's here. But that downturn also sees growth rates returning to normal from inflated pandemic-era highs.
- Despite the sour economic vibe, we still expect total media ad spending to stick close to its current growth trajectory of 13.2% year over year.
- Even though consumer spending is cooling off, retail sales are still expected to rise 6.4% this year. Strong travel figures have also prompted airlines like United to launch its first ad campaign in nearly a decade.
- There are still several proven, growing sectors for ad dollars to move to. US search ad spending will grow 14.5% this year to $99 billion. More direct channels like email marketing have also proved resilient.
The takeaway: Consumer spending figures will be a crucial signal for advertisers looking to adjust their spending.
- If advertising’s rocky outlook continues, ad channels that already had issues will be hit hardest by cuts as marketers look to put their tighter wallets to use on more reliable sources.