A review of recent economic indicators suggests that the advertising business isn't ready to call 'recession,' according to Group M's most recent “This Week Next Week” podcast.
“We had the biggest sellers of advertising on earth give us their numbers, and we [saw] high-single-digit [increases] between this and next quarter – probably the two worst quarters of the year – and we had a really strong first quarter,” “This Week” co-host and GroupM Global President, Business Intelligence Brian Wieser says, citing uptrends for advertisers such as Nestle, Unilever and P&G. “Yeah, they'd rather have less input cost inflation, but that's still pretty positive. So I think we're feeling pretty good about our forecasts for advertising for 2022.”
The Group M podcast's other host, Essence Global VP, Thought Leadership and Innovation Kate Scott-Dawkins, also sees positive signs through Q3 2022. “[Some are] seeing strong advertising growth and some saying maybe a bit flat over the next quarter, so mixed bag, but given what we already have through the first half, I think that's giving us some confidence going into the full-year numbers.”
Pointing out common misconceptions about advertising in a down economy, Weiser asks, “Why do people believe that advertising is correlated to GDP? Why do executives say advertising is the first thing that gets cut in a recession, or [that] performance-based or brand advertising is the first thing that gets cut? And yet we're seeing here clearly, collectively, advertising is actually growing.”
Looking at overall economic trends, Wieser still sees the glass half full. “We have positive year-over-year growth, and we have inflation on top of that pushes us to really high numbers,” Wieser says, referring to GDP numbers that are north of 10% when adjusted for inflation. “That's not to say that these are conditions that are ideal, [and that] this is not the economy we all want, but is it as bad as the headlines suggest? I say no.”
“It's not that everything's healthy,” Scott-Dawkins says, “but it's also not clear that we're in a recession."