We are hearing from industry experts that in response to the tougher economic climate, some advertisers are cutting back on upper-funnel brand efforts and not necessarily reallocating to direct-response approaches. By contrast, certain advertising within Meta (Facebook and Instagram direct-response) is “almost recession-proof,” according to a former manager at TikTok Inc. “People know exactly what they’re going to get, which is a positive return on investment, and if they don’t get conversions they don’t have to pay.” With that said, the specialist expects the general pull from e-commerce to impact revenues, echoed by another who said supply chain issues and inflation impact social platforms because many advertisers are pulling their spend. “Even TikTok and Meta, I think you’ll see similar impacts, especially with Meta Reels and short-form, because that’s an area where they have not made the same strides and performance in driving clear revenue benefits as they have on more traditional Instagram advertising and Facebook advertising.”
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