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Q2 earnings are (almost) behind us, and just like your cousin’s bachelorette party, there’s a theme.
What is it? Ad spend is down. If you haven’t been paying much attention, companies including Meta, Roku, Pinterest, Snap, and Microsoft mentioned a slowdown in ad spend during their Q2 earnings this year.
- Zoom in: Last month, employment at US ad agencies totaled 220,500 jobs, according to the Bureau of Labor Statistics, which Ad Age said was an “all-time high.”
Looking ahead: If we are headed toward a recession (or something like it), some say it’s best to keep spending those ad $$.
- Candace Nelson, who co-founded cupcake brand Sprinkles a few years before the Great Recession, recently advised businesses to “fight the urge to slash sales and marketing budget” during a market downturn.
- “In a less noisy ad environment, it’s easier to be seen and heard—and it’s less expensive to get in front of those customers,” she wrote. “Marketing and advertising could very well be the unexpected workhorse to carry you through an economic depression.”
- A recent study by Analytic Partners, which analyzed “hundreds of billions in marketing spend,” found that brands that reduced ad spend during the last recession “risked losing 15% of their business to competitors who boosted theirs.”
- In June, Steve Grant, SVP of human intelligence at Horizon Media, told Marketing Brew that challenger brands that are “aggressive with their spend and targeted with the messaging and activation strategies that they take” can end up making “some headway against overcautious, dominant incumbents” if the latter pulls back on advertising.
+1: Major companies like Diageo, Uniliever, and Coca-Cola all recently said they’ve increased marketing spend this year.—MS