Results Magazine: How Advertisers Can Thrive Throughout The Next Recession
Originally Published: December 2022 Edition Results Magazine, PDMI
By: Matt Wasserlauf, Co-Founder and CEO of Blockboard
A recession is looming. Those of us in the digital advertising space have already seen some early impacts. Advertising leaders like Meta, Twitter, Snap, and Amazon announced large-scale layoffs as advertisers have started to cut back spending in response to inflation that is impacting consumers’ spending. While it’s tempting to think of a recession as a time to tighten budgets and play it safe, history has proven that economic downturns end up driving innovation and encouraging the adoption of new technologies to survive and — ultimately — thrive.
Today’s digital advertising landscape is rapidly changing and looks nothing like it did during the Great Recession of 2008. Back then, many leading brands went dark with no ad spend for more than six months, and the entire U.S. advertising market dropped by 13 percent. Since companies weren’t advertising, they were struggling to reach consumers and ultimately lost all business momentum.
In most instances, brands went dark because they had already seen a decline in sales. However, the rate of decline actually became steeper when advertising stopped, and — even after the recession concluded — it took years to regain their pre-recession sales rates. For decades, online advertising has been controlled by industry giants like Google and Meta, forcing advertisers to measure performance based on the numbers they were told. But where are their dollars actually going? These platforms have become infested with bots, manipulating ad impressions and making it an unsustainable environment for advertising. In fact, nearly 75 percent of media spend is lost to these factors. Companies have grown so accustomed to this lack of transparency (and continue to turn a blind eye to the billions of dollars lost to this each year) that it’s no wonder they think the answer is to cut their budgets.
We should not fear the next recession. Now more than ever, each dollar matters. Heading into 2023 and on the cusp of a recession, advertisers need 100% transparency to ensure effectiveness in their media investments. Shifting their traditional business models to include innovative technologies will help companies through the challenging times ahead.
CTV will become a primary marketing channel. In 2022, 92% of US HH were reachable by CTV programmatic advertising, including more than 110 million among Gen Z and millenials. As audiences continue to flock to streaming, CTV will need to be prioritized, and marketers should be testing now before they are behind.
But what if they were guaranteed that 100 percent of their media spend would go to use? The next generation of digital advertising, coined "programmatic 2.0," does just that.
Programmatic 2.0 leverages Web3 principles like decentralization and transparency to create an ecosystem that is safe and secure for media investment and guarantees truthful, verified results for each campaign, 100 percent of the time. This transformation comes at a time when advertisers are eager for data-driven results that will set them up for long-term success when the economy rebounds.
For instance, 74 percent of marketers said that if they had access to more transparent data, they would increase their spending on programmatic advertising by at least 11 percent, and — in some cases — by 50 percent or more. No more bots and inflated numbers: this level of transparency helps advertisers avoid ineffective campaigns and wasted media dollars, which will be critical to thrive throughout the recession.
Recessions bring new opportunities for brands to reinvent themselves, reconsider priorities, and strengthen their market position. To make sure you are prepared, start by looking at the results of your latest campaign. Do you feel that your investment hit your overarching goals? If not, it’s time to update your advertising technology and consider integrating Web3 tools to ensure you’re maximizing performance.