Last week, I tweeted select slides from a presentation that I delivered to clients and to the Mobile Dev Memo community in March 2020, at the onset of COVID, titled “Advertising Strategy in a Recession.” A number of people asked me to share the entire deck, and I’m doing that below with a slightly edited version. I removed dated references to COVID and updated data in some places, but the content remains primarily the same. Click the “full screen” icon at the bottom right corner of the presentation to expand it.
Whether the US or global economy enters a recession is anyone’s guess. But with a steady drumbeat of layoffs and hiring freeze announcements, it’s obvious that many consumer technology companies are preparing for that outcome. As I point out in the presentation, advertising follows the business cycle, but contractions in advertising spend tend to be more severe and pronounced than changes in real GDP because advertising budgets can be adjusted quickly.
For that reason, advertising is one of the first expense line items to be adjusted in the face of an economic downturn. That reactivity can help a company to preserve precious cash in a deteriorating economy, but it can also steal revenue from the future: a more productive approach is adapting measurement and predictive analytics to new consumer spending habits and eliminating inefficient advertising expenditure. The goal of this presentation is to outline some tactics for achieving that.