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> What is going to happen to advertising budgets (practically their only source of revenue) in the next recession There's a general theory that advertising is

by mbesto 9y ago

> What is going to happen to advertising budgets (practically their only source of revenue) in the next recession There's a general theory that advertising is a zero-sum game. In other words, as a percent of GDP it has neither grown or subtracted significantly since it's wide spread use. This effectively means that new media (FB/Google/etc) is simply taking market share away from other disparate providers. If anything, a recession will only accelerate that trend. When companies are faced with re-thinking their ad spend and realize that their eyeballs are no longer in print/radio, it serves as an easy to stomach switching cost decision. [0] - https://stratechery.com/2016/the-reality-of-missing-out/ https://stratechery.com/2016/the-reality-of-missing-out/

kgwgk 9y ago
Advertising spending went down over 10% in 2009 compared to 2008 (I thought it was more than that). In that kind of environment Facebook might still gain share but growth and margins are likely to suffer. And Facebook/Google represent already one third of the advertising business in the US, they can only increase market share up to a point.
- mbesto 9y ago
  > Advertising spending went down over 10% in 2009 compared to 2008 Well ya, it's directly correlated to the general economy. The economy tanked in 2009. But that's my point, that 10% dip is going to cause everyone to reevaluate their advertising budgets and shift to more efficient spend. https://www.vox.com/2015/9/18/9351759/ad-blocking-controversy https://www.vox.com/2015/9/18/9351759/ad-blocking-controvers... > growth and margins are likely to suffer. > they can only increase market share up to a point Why? There's still 2/3rds to grab. Thats A LOT.