Improvado’s Research Reveals That Total Ad Spend Has Decreased Twice in the Last Two Years Against the Background of Global Crises

Some niches are experiencing major trouble. For example, the retail and ecommerce industries have suffered heavy losses because of a shipping crisis, computer hardware manufacturers are failing to meet the needs of the market because of chip shortages, and US companies have less than a five-day supply of semiconductors

With the pandemic finally beginning its retreat, businesses are gradually shifting their digital ad dollars to other platforms. According to Improvado’s latest research (February 2, 2021),  some industries, like the Internet (+47.50%), online media (+29.50%), and food and beverage (+65.53%), have experienced a significant growth in digital ad spend. However, the majority of large industries, such as logistics and supply chain (-16.70%), airline (-26.08%), e-learning (-48.12%), and consumer services (-13.92%), have reduced their digital ad spend in Q4 2021 compared to Q4 2020. A possible cause might be the reduced efficiency of paid ads caused by Apple’s recent privacy updates that increased CPA for tracked and non-tracked users.

Among the industries that raised their digital ad spend are financial services (+107.58%), venture capital and private equity (51.75%), utilities (25.52%), capital markets (86.78%), and commercial real estate (215.81%). Industries such as commercial real estate and financial services suffered heavy losses from the pandemic, so now they try to regain the lost ground.

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However, many sectors have reduced their digital ad spend and redefined their marketing strategies due to global crises and decreased effectiveness of paid ads. The industries that experienced the largest decrease in digital ad spending are government relations (-99.01%), automotive (-82.04%), biotechnology (-79.14%), retail (-58.23%), warehousing (-55.24%), and leisure, travel, and tourism (-45.74%).

The goal of Improvado’s research was to discover the patterns emerging across various sectors and identify how businesses are managing their marketing budgets, as well as predict how marketers will manage their campaigns in the post-pandemic future.

Following a detailed analysis of digital ad spend data from the US, UK, and EU, Improvado’s research team noticed that worldwide spend for paid search advertising across all industries had decreased by 35.6%.

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For industries struggling to acquire new customers with paid ads, Dmitry Nasikanov, CTO and co-founder of Improvado, recommends upgrading their marketing analytics stack and keeping up with today’s marketing trends. “The global decrease in paid ad spend isn’t only a result of post-pandemic tendencies. Recent privacy updates, lead attribution constraints, and cluttered marketing data aggregation processes make marketers believe that paid ads become less effective. However, the first ones to upgrade their data stack and set up cookieless attribution will get the most yield out of marketing campaigns.”

Improvado has also uncovered similar trends to those mentioned in the recent Gartner report on marketing budgets. By analyzing and comparing findings from the current Improvado report with the company’s previous research on COVID-19’s impact on digital marketing, Improvado has highlighted how the situation has changed since the start of the pandemic.

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