Expert_Opinion_
Richard Kramer
Managing Director and Founder
at
Arete Research

Digital Ad Spend: Brace Position

While I will not dispute that Meta is losing share of ad spend, I fundamentally disagree with the blanket statement that “in tough economic times, advertisers increase spend.” 

There is simply no doubt now that there are entire segments of digital ad spenders which have simply slashed or stopped altogether their ad spend. 

You can see the 10 quick commerce startups in Europe which are no longer spending like drunken sailors to acquire customers irrespective of whether they turned out to be fraudulent impressions or were retained beyond incentivised first purchases. 

The same can be said of the hundreds of crypto start-ups, fintechs, DTC apparel or FMCG brands, casual mobile game developers, new subscription economy/creator economy offerings, etc. are all now on much shorter leashes, eager not to exhaust their VC funding . 

One cannot ignore the overall shrinking of ad spend, nor simply wave it aside by saying everyone will “need to spend more in tough times.” You can’t spend what you don’t have, and you cannot ignore the fact that unlike a year ago, there is a real cost of capital and hurdle rates for investment returns have clearly gone up, while discretionary consumer spend is clearly weakening.

I presented on this topic at DMEXCO, contact me to receive a copy of the presentation.

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Related_Wire_

Meta Q3 Earnings Report -4.5% YoY Revenue Decline. Net Income Down -52.2% YoY.

Earnings
October 26, 2022
Primary Source
Earnings Report