US banks continued to invest in digital ad spending, which boosted rapidly in 2021. After that, many firms anticipated that consumer spending would recover. Alongside this, it is expected that large banks will be spending heavily on the growth of digital advertising to drive ad spending through 2024. If an economic recession happens and the budgets are cut down, it’s quite clear that tech and talent will get the preference over customer investment.
US Ad Spending Stats
According to the statistics, the digital ad spending of US banks in 2020 was $8.61, while the change was 8.1%. The following year, it recovered and accelerated by $11.25, highlighting the 30.7% increase in growth. In 2022, 20.4% growth was expected, with a $13.54 billion boom that shows the 20.4% change. Furthermore, the percentage change in growth will go down in 2023, but digital ad spending will increase to $15.08 with an 11.4% change. In 2024, digital ad spending will again be higher than before, that is, $16.59, with a 10% change in the growth level. This data includes digital advertising on laptops, computers, tablets, mobile phones, and other devices connected to the Internet.
In conclusion, advertising spending will continue growing throughout 2022 and even later. However, the economic recession will fall over, causing every ad-reliant company a constant fear. It would have clear implications and effects on digital advertising. Thus, consumers would have less to spend, so it is evident that they won’t go and buy everything they get to see. Likewise, it doesn’t make sense to advertise products that consumers will not purchase. Both supply chain challenges and inflation would have a substantial impact on advertising.
Moreover, big tech firms reliant on advertising revenues have also been warned about it. As an example, Snapchat even warned its investors last month that it would be unable to make it this time. The app informed their investors that the social media stock would face a downturn.
A lot of advertising sectors are also having a hard time facing the changes in the industry. It’s about time for a widely accepted solution like AppTrackingTransparency to emerge. It would further cause the companies to bear additional ad revenues. As a result, they will be unsatisfied and uneasy with the effectiveness of their ad spending.
Is Video Advertising Worth It?
Despite its popularity, video advertising has its downsides. The adoption rate of Connected TV (CTV) is much higher in the USA than linear ads, making advertisers spend more on CTV. However, an authentic study showed that advertisers are losing $1 billion on dead ads annually. This has been another cause for concern that relates to the accuracy level of the digital ad system.
The economy’s current state is still different from the recession in 2008. Multiple aspects set both situations apart, which instills the advertisers with a bit of hope and positivity. The expected increase in the US digital ad spend in 2022 will be 13.2%. According to Insider Intelligence Analyst Peter Newman, ad spending decrease in the recession from 2008 to 2009 was 17.5%. Different mediums like prints were the primary reason behind the decline at that time, but digital sources like TV remained intact for years, even after the recession.
The other highlighted difference is that consumer spending is going through changes but still seems strong despite inflation and other economic conditions. However, firms and tech companies need to make proper adjustments to their plans.
CTV and social media may face a little trouble, but advertisers have multiple places and ways to invest. For instance, Facebook also had its fair share of miseries, but it always manages to bounce back even stronger than before. At the moment, Facebook continues to try to protect both the consumers and advertisers to help them benefit from a tightened ad market system.
Other ad formats, like “Augmented Reality” and “Search,” will continue to give advertisers more options to invest their dollars without worrying about revenues.
The economic structure today and the recession of 2008 are not the same. The ad industry’s thunderous changes might not be easy to tackle. However, US banks, companies, and tech firms are on their way to finding new practical solutions to understand how to operate in the changing outlook. With that in mind, it’s pretty clear from the above stats and research that the digital ad spend game will stay strong throughout 2022.