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Read Delete: Advertisers Hit the Brakes Amid Economic Uncertainty

Advertisers Hit the Brakes Amid Economic Uncertainty

 

When Google’s parent company Alphabet reported a slowdown in advertising sales in its latest quarterly earnings report on Tuesday, it stoked fears of a broader advertising downturn. After all, Google is by far the largest media owner in the world, with more than $200 billion in annual ad sales. And if a dominant player like that sees sales slow down significantly, that doesn’t bode well for the rest of the industry. In the three months ended September 30, Google’s advertising sales growth slowed to just 3 percent year-over-year, the lowest it’s been since 2009, apart from Q2 2020, when Covid stifled ad spending around the world.

As the following chart shows, Google’s advertising slowdown is in fact part of a broader trend, as advertisers cut budgets amid recession fears and a sea of uncertainty. According to Standard Media Index’s September 2022 Core Data report, ad spending in the U.S. dropped by 5 percent in September, continuing a four-month decline. Total ad spending across all media was down 6 percent in the third quarter, as both digital and television ad spending growth evaporated over the first nine months of the year.

With recession fears looming large over the U.S. economy, advertising businesses should batten down the hatches, as ad spending has historically declined disproportionately amid economic downturns.

Source: Statista

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ABOUT MIKE MERCURIO

Mike Mercurio | mmercurio@offitkurman.com | 301-575-0332

Michael N. Mercurio is a leading attorney in the field of mergers and acquisitions (M&A). He serves as outside general counsel in buy-side and sell-side M&A, as well as in all business law and real estate law matters. As a strategic partner to firm clients, Mr. Mercurio regularly counsels entrepreneurial individuals and assorted entities on the many challenges, issues, and opportunities companies face throughout the business lifecycle—from start-up to eventual exit.

 

 

 

 

 

ABOUT OFFIT KURMAN

Offit Kurman, one of the fastest-growing, full-service law firms in the United States, serves dynamic businesses, individuals and families. With 18 offices and more than 250 lawyers who counsel clients across more than 30 areas of practice, Offit Kurman helps maximize and protect business value and personal wealth by providing innovative and entrepreneurial counsel that focuses on clients’ business objectives, interests and goals. The firm is distinguished by the quality, breadth and global reach of its legal services and a unique operational structure that encourages a culture of collaboration. For more information, visit www.offitkurman.com.

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