“You know who” had a meeting with his fellow Twitter employees in which he talked about how advertising return on investment (ROI) doesn’t need to be provided in bull markets. Just throw money at any old influencer and who cares what sticks. These days, media companies need to show they’re effective at showing an ROI on advertising spend, especially for social media.
Social media may be a disruptive technology, but it has done little to benefit mankind except to create a generation of superficial narcissists with eight-second attention spans. More concerning are marketers in big corporations throwing money at this behavior under the guise of buying “influence.” Consequently, social media firms have become fat and lax, Twitter being a great example of what easy money does to large companies.
Mr Musk’s takeover of Twitter provided the perfect catalyst for advertisers to start questioning what ROI their ad spend has been getting. Outrage aside, the corresponding revenue decline is part of a much bigger picture – the global slowing of advertising spend.
Advertising Spend Slows
Ad market growth is expected to slow down significantly in 2023. That’s according to marketing analytics firm WARC which expects global ad spend to grow by 8.3% this year to a total of $881 billion, but fall to 2.3% growth in the coming year. There’s every reason to believe growth will stall because of the delayed reactions we’re seeing. It takes time to craft messaging around layoffs and budget cuts. Firms are now doing year-end budget planning and goal setting, so we can expect less money will be thrown at advertising since (wait for it) people and companies are spending less because it’s a bear market. These vicious cycles can quickly curtail ad revenue growth.
Proof of the ad…