Reasons for bad times for network advertising

Reasons for bad times for network advertising

Until a few years ago, experts viewed social networks as an intangible source of business income.

But right now, social media is experiencing an advertiser confidence crisis, with a growth rate of only 3.6% in 2022, ten times slower than in 2021.

While the turbulent global economy may explain this slowdown, there are other factors that helped create the perfect storm. social media giants.

The role of big players

Generally, during times of economic crisis, large companies tend to flex their finances and redouble their advertising policy efforts to strengthen their position at the top of the supply chain.

On this occasion, however, things didn’t go that way as the advertising spending by the big players in the market was somewhat uneven and many providers felt it was important to launch luxury products. in the middle of a crisis It can affect your image.

The restriction of the advertising budget had a domino effect on social networks, which drastically reduced their revenue.

The recession in the industry came much earlier than expected. Martin Sorrell, head of advertising holding company S4 Capital in 2021, boom The publicity given at the time would peak in 2023, which took place a year earlier than expected.

the world of the game

The rise of online games has created a lucrative cycle for both game providers and the main social networks in the market. The more games presented on social networks, the more subscriptions were received, which helped finance new advertising campaigns.

But the pandemic and the cost of living crisis has had a strong impact on the purchasing power of players. The growth of free video games has resulted in a loss of revenue that has led to cuts in advertising for industry giants.

In the world of online casinos, players have moved from depositing money to their usual casinos to searching for special offers on Google by typing things like “”.no deposit welcome bonus 2023». However, the wide variety of free games of chance didn’t help the casinos much either.


Apple, the world’s largest company by market capitalization, is one of the biggest competitors of social networks, which has seen how the new App Store is causing a real headache.

Although Apple CEO Tim Cook says that the App Store’s advertising business is not so big compared to other players, it is growing at a rapid pace. On top of that, new iOS privacy restrictions ten billion dollars less revenue from major social networks.

While Apple has developed new tools to measure performance and improve the effectiveness of ads, their success has greatly contributed to the weakening of social networks, as many users are not able to see important ads.

electronic trade

The explosive growth of social networks has taken many traders by surprise, who are not afraid to jump on this winning bandwagon. Many have decided to invest in major platforms that promote their products without providing important consumer data.

Companies like Walmart have chosen another path: In recent years, they’ve developed their own digital marketing tools and become part of the business from platforms like Facebook or Instagram. Amazon took the lead by building a digital model that many people copied.

Traders now have more control over their consumer approach options. Internet advertising has been charged to the middleman and now appeals to potential customers from a closer perspective.

In addition, these companies have been less affected by changes in Apple’s privacy policy, as they are not as dependent on third-party data as social networks.

Before we go any further, Amazon announced a 32% increase in your ad revenue.

Mark Zuckerberg

Meta, the company that owns Facebook and Instagram, is the source of many problems.

Mark Zuckerberg’s insistence on investing heavily in the metaverse at the time of the crisis was widely criticized on Wall Street, with many analysts saying it threatened the social media giant’s long-term health.

Although Zuckerberg asked for patience and assured investors that he would be rewarded, analysts showed no mercy to the internet guru. Mark Mahaney believes that one of Meta’s priorities should be to reinvent its outdated ad targeting tools. If the Evercore analyst is right, we may be at the beginning of the end for one of the social media giants.

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