Where Does Advertising Stand in This Challenging Economy?
It’s a perfect storm of challenging times. Political unrest—in the U.S. and throughout the world—makes headlines daily. The COVID-19 pandemic, despite advances in prevention and treatment, remains a threat, with the BA.5 variant of serious concern. And then there is the economy. Inflation continues to rise before our eyes. Will there—or won’t there—be a recession? What is the outlook for businesses that need to get their goods and services seen before existing and potential customers?
Will there or won’t there be a recession?
The times we live in are not only challenging but paradoxical.
Yes, the rise in both inflation and interest rates would seem to be telltale signs of a recession. Wayne Duggan, writing for Forbes, cited a more than 50 percent possibility of a recession, according to TD Securities.
On the other hand, there has been a spike in new hires across the country. Mr. Duggan also pointed out findings from Jeffery Roach, who is the chief economist for LPL Financial, of an impressive addition of 372,000 jobs to the U.S. economy, which went well beyond the predicted figure of 250,000.
In short, there is no definite indication—as of this writing—as to whether or not there will be a recession in the near future.
What is clear, however, is that advertising will remain strong. Is this another paradox? Not necessarily.
Memories of the past
One reason many people are bracing for the possibility of a recession dates back to the situation of 2007 through 2009. Significantly named “The Great Recession,” memories of that time period still linger. During that particular recession, the U.S. gross domestic product fell by 4.3 percent. This recession proved to be the worst since World War II. What everyone must be mindful of, as Daniel Konstantinovic observes in Insider Intelligence, is that the economic situation of today is not the same as it was in 2008. And the overall performance of advertising is a clear example of this difference.
Advertising is beating the economic odds
Despite the current downturn, ad spending will continue to grow. Mr. Konstantinovic notes that there is a projected increase of 13.2 percent in ad spending, year over year, by the end of 2022—in contrast to the 17.5 percent decrease that took place from 2008 to 2009.
So, advertising is still strong. As difficult as times are, it is now more important for brands to market themselves to their best advantage in order to reach their right audiences. If you are concerned about the challenging economic situation and wonder how to keep your brand or business visible, give EGC a call. Through our branding and development services, we can help pinpoint whether you would benefit from either a stepped-up social media strategy or a refreshed public relations campaign, among other options.
EGC is keeping on top of the current economic situation through The Steadfast Series. Check out “Marketing in Times of Inflation” and “Pricing and Promotion in Inflation” for unique insights and ideas.