Comment by grey-area
8 months ago
Interesting dynamic here with echoes of the .com bubble where there is a huge web of industries all dependent on the current setup continuing and money being available for consumer spending and ads - when that dries up it will impact not just those selling goods imported from China, but everyone in the US.
Disrupting US trade quickly with massive global tariffs will cause all sorts of secondary effects like a massive downturn in ad spending - directly affecting companies like Meta and Google who look insulated right now because they don't sell physical products.
Not a great time to be dependent on ad revenue.
Conclusion is wrong here. There’s plenty of bid for the ad inventory. Google and meta are extremely resilient to this kind of thing
I can't see how can add industry be resilient to recession. Maybe if you switch to selling ads for government propaganda?
So generally speaking, advertising is not resilient to downturn.
In 2008, there was an expectation of revenue loss. But because Google "direct advertising" directly affects sales... it was more like "sales" than traditional "marketing" in this respect.
In 2025, it may be different. We shall see.
I don't think much online ad revenue is related to physical products. The margin available for ad spend on physical goods is much slimmer. But... it's hard to predict 3rd order effects.
Advertising on the whole is not recession proof[1], although in the last two dips Google showed growth in ad revenue[2], and Meta was relatively stable[3].
The first thing that gets cut is 'new channels' and experiments (read: channels that have bad measurable ROI). Pinterest, X, Snap.
After that it's the most 'wasteful' brand spending/high cost per reach broadcast media that gets cut. Cinema, local TV, and increasingly nationwide TV.
Then when the economy comes back to growth there's a broader recalibration of budgets.
Because Google search has a very simple, easy to understand impact on sales they actually grew faster in recessions. Then when the recession ends brands don't see any reason to cut that spending.
1 - https://www.ibisworld.com/us/bed/total-advertising-expenditu... 2- https://www.statista.com/statistics/266249/advertising-reven... 3 - https://www.statista.com/statistics/268604/annual-revenue-of...
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Even when this kind of thing is a global recession and the end of US supremacy?
If they stick with the tariffs we’ll see I guess though it seems likely Trump will have to back down.