Q4 2022 Newsletter: A Temporary Slowdown in Digital Advertising
It’s true—across the board, there’s an advertising slump going on this Q4. While digital advertising hasn’t been hit as hard as television and other media, what we’re seeing at NitroPay is that advertising revenues have slightly increased, but mostly flatlined for the month of October and are staying much flatter than normal this November. Black Friday week is coming up, but there’s rumblings that even the end of November is going to be much less profitable in 2022 than previous years.
What is causing the advertising slump?
Right now, there is a lot of economic uncertainty, both in general and regarding holiday shopping. Inflation is high, there are fears of a recession in the United States and many other western countries, and retailers are predicting that customers will spend less this holiday season. As a result, advertising budgets are being cut.
Big players such as Alphabet (Google), Meta (Facebook), and Snap have reported missing revenue targets in their Q3 earnings calls and are continuing to signal that this holiday season is going to be off target. This slowdown in the digital advertising market is a big factor in those results, and shows that no one is immune to the slump.
You will find more infographics at Statista.
Despite the declining trends in the first three quarters, we anticipate that numbers will go up slightly in Q4—but those increases will be much more muted than in prior years.
What can publishers do to combat the advertising slowdown?
Optimizing viewability and adding high value placements (floating/sticky or video units) is a great place to start if you haven’t made these adjustments earlier in the year. Viewability continues to be the best indicator of revenues, pushing that metric without sacrificing impressions is definitely an offset.
In general, though, this slowdown is out of publishers control. The last few years have been great for advertising rates (minus the initial COVID dip), but with markets being a bit more skittish this holiday season, it’s not unexpected.
As always, if you would like to optimize or work on something, please email [email protected] or send a message to your account managers.
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