In less than a year, several large tech firms have announced hiring cuts, digital assets are beginning to act like liabilities, notable tech companies are filing for bankruptcy, and a dramatic fall in stocks and overvaluation currently plagues the tech industry.
Did Tim Cook see this coming when he decided to sit out the Metaverse race?
As falling stock prices coincide with heightened inflation and rising interest rates, Meta’s Metaverse division lost about $2.8 Billion; Crypto lenders, Celsius and Voyager filed for bankruptcy; Apple lost $154.11 billion in market cap and fell 5.87%, suffering its steepest drop since September 2020; Microsoft lost $109.33 billion and dropped 5.5%, its steepest drop since September 2020; Google parent Alphabet lost $85.32 billion and fell 5.9%, its steepest drop since March 2020
What does this have to do with digital marketing?
Short answer, everything.
As the cost of living crisis continues to erode consumer purchasing power, and the global economy weakens, companies are also beginning to cut back on their marketing budgets, especially in the face of a looming recession.
According to James McDonald, director of data, intelligence and forecasting at Warc, even spending on digital media which has for years hoovered marketing budgets away from traditional outlets such as TV, newspapers, magazines and radio is not immune to the massive shift in ad spend priorities.
“The once unstoppable $115bn advertising behemoth that is Meta, the owner of Facebook and Instagram, stunned markets by reporting its first ever drop in revenue, and forecast another decline for the third quarter,” McDonald said.
“The mood music has changed within the industry recently. Forecasts are not looking as positive as they were. I’m not saying an advertising recession is imminent but the likelihood has increased.”
