Ad Industry's Big Spenders Permanently Shifting Strategies: EMarketer

A 3.3% year-on-year ad spending decline in August, the third consecutive monthly ad spend decrease, was “far better than the market performed in July,” when ad spending dropped 12.7%, reported eMarketer Thursday, saying the August numbers “should ease some anxiety that July’s dramatic figures would become the norm.” Still, “until core issues plaguing the industry are resolved,” said analyst Daniel Konstantinovic, “the downturn will continue.” Konstantinovic called year-on-year spending decreases “inevitable” as post-pandemic “normalcy” resumes. “Digital ad spending reached record highs during lockdowns that increased the average consumer’s screen time, but now that society is reclaiming some normalcy, issues with addressability, measurement, and economic uncertainties have caught up with the industry," said the analyst. July figures were particularly rough due to the lack of major sporting events, he noted. Issues with addressability and changes in consumer spending habits are driving the industry’s big spenders to “permanently shift their strategies,” Konstantinovic said. The recent spending downturn came mostly from the top 10 ad categories, which had a 5.1% falloff, the most noticeable coming from carmakers, which cut spending 23% in June and 43% in July, he said. The money is going instead to customer experience and post-purchase marketing, he said. Worldwide ad spending on technology and electronics is expected to be up 25% this year vs. 2021, eMarketer said.