"Slowing economy" ranks as top factor for ad buyers' spend reductions
For ad buyers reducing their projected U.S. media spend for H2, the most common factor was a "slowing economy," according to an IAB study released Thursday.
Why it matters: Per recent earnings reports, many businesses reliant on advertising have missed their revenue expectations, lowered guidance and instituted cuts that could mean fewer acquisitions or investments.
Details: IAB reported that 74 of the 250 ad buyers they surveyed earlier this month said they were reducing their projected total U.S. media spend for July to December this year.
- Along with the slowing economy, the other top factors were supply chain bottleneck and consumer inflation.
- The other category at 22% includes COVID, budget shifts and restructuring and other business challenges, per IAB.
Yes, but: Despite these reductions, which several global ad agencies have similarly predicted, IAB said buyers on average projected H2 2022 ad spend to be up more than 7% compared to their original plans.
- But when asked if the U.S. is currently experiencing or likely to experience a slowing economy that will decrease total U.S. ad spend within the next year, about 71% of the 250 surveyed ad buyers said yes.
- The majority expected that impact to occur in the first half of 2023.
- Still, buyers said they expect ad spend for H2 2023 to be up 10%, on average, compared to H2 2022.