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Recession and effects on the digital marketing ecosystem
Akaash Ramakrishnan, Co- Founder & COO, AdSkate July 7: The global economy is in entering into a recession state. Recently the S&P 500, the stock market index for the top 500 performing companies in the United States, confirmed that the market is in a bear market state. The United States is currently the world’s largest […]
Akaash Ramakrishnan, Co- Founder & COO, AdSkate
July 7: The global economy is in entering into a recession state. Recently the S&P 500, the stock market index for the top 500 performing companies in the United States, confirmed that the market is in a bear market state. The United States is currently the world’s largest economy and they are going to try the nation from slipping into a recession state. To do this the United States Federal Reserve is going to push for higher interest rates which would potentially lead different world economies into a state of pandemonium. The market has fallen for the past week straight leading to a frenzy. The S&P plummet by 21.8%. Experts are expecting people’s purchasing power to diminish over time. All of this sounds grim for the digital marketing industry.
Let us take a deeper look into how the looming global recession is going to potentially affect the digital advertising ecosystem. During the peak of the pandemic, ad-buying had increased by 38% compared to the previous year (2019) but in 2022 a deceleration in terms of ad buying is visible. A massive reason for the deceleration in advertising ad spend is because China accounts for 20% of ad spend and the ongoing war in Ukraine has had an adverse effect too. According to a recent statistic by GroupM e-commerce sales grew only by 6.7% in 2022 compared to the previous years. This has been the slowest growth rate noticed in the e-commerce industry since 2020. Additionally, GroupM predicted that consumer price inflation is going to soar upwards of 7%.
