If you just look at the data, it paints a very grim future for marketing… at least in the short run.
and if you are an influencer you might be frighten about your future on social media, but let’s dive in together and see what really going to happened in 2023 and how it effects the digital future work.
As we see and hear from the news, we may go into a global recession as the Federal Reserve continually increases interest rates and it has caused businesses to cut back, especially on the advertising front.
Some world-wide numbers
Just look at the recent earnings calls from advertising giants. Alphabet only slightly increased advertising revenue in total, although YouTube decreased by roughly 2%.
They are also seeing massive pullbacks in some large industries. For example, there has been a pullback in crypto, mortgage, insurance, and even gaming ad spend.
And it’s even worse for Meta. Their average revenue per user has dropped to $9.41 versus $9.83.
They also stated that their Q4 revenue, which mainly comes from advertising, is lower than most predicted with a range of $30 to $32.5 billion.
Snap had a similar story to the other online ad platforms, while Pinterest grew 8% a year which was more than analysts expected.
Nonetheless, no matter what platform you look at, it’s safe to say that the advertising industry is seeing a slowdown.
Now let’s dive into the obvious bad news, and then we will get into the silver lining and how you should adapt. Because there is hope and you can still do.
Traditional marketing Vs. Digital one
The marketing industry is going in a downward direction fast. I’m no economist, but most of it is related to external factors none of us can control… such as rising interest rates, supply chain issues, increases in oil and energy prices, issues with real estate across the world, and worst of all, war.
But what about marketing?
Here’s what’s interesting…
Because our company, Al Ahmar Marketing hub, works with companies of different sizes we see data from both small and medium businesses as well as enterprises.
Here are the 3 main trends we are seeing:
Trend #1: Ad costs are decreasing
Overall, the global costs for ads have been going down by 4%. Some industries like real estate have gone down much more, but with other industries like B2B SaaS, we haven’t seen much of a change with our clients as they optimize for lifetime value.
A lot of this is because businesses are cutting back on their spending in addition to many sectors such as real estate not having the same demand that they had a year ago.
Trend #2: Buyers aren’t converting at the same rate
We aren’t seeing conversion rates as high as they used to be. We’ve seen a drop of 7.13%.
Keep in mind that different websites have different conversion goals. Such as one website may focus on leads while another may focus on a signup or another may focus on a purchase.
Conversion rates are also affected by many other factors such as companies increasing prices due to inflation costs, shipping costs, and supply chain delays.
Or conversion rates being lower because some people aren’t spending as much because they may have lost their job.
Trend #3: Companies are fearful of the unknown
We are seeing some companies pulling back on their total marketing budget because they are afraid of what lies ahead.
But we are also seeing companies shift their budget to digital marketing because it is easier to track than let’s say traditional TV or radio advertising.
Now we don’t manage traditional budgets for our clients, but we handle the digital side. In a good or a bad economy, companies tend to spend on digital marketing (things like SEO, paid ads, email marketing, social media, etc) as long as it is profitable.
The silver lining in marketing
There’s a pattern that we have seen with the companies that have been growing this year (the ones we work with at least).
These companies are also taking advantage of the current economic climate to double down on their whole business, not just marketing, to gain more market share.
At the end the future of digital marketing is bright and shiny, and it’s a big wall against world economic recession, so that’s good news to start a new year with, whether you were a blogger- content creator or an influencer, you will be safe from any bad news at least for long time. So stick to your plan and reach to us if you want our help in influencer marketing.