Skip to main content

How Has the Current Economic Environment Impacted Paid Media? Part 1: The KP Perspective

Economic headlines have dominated the news over the past few months, particularly related to inflation and recessions.

This kind of turmoil can be especially stressful as an agency. Businesses may start looking to make cuts so they can save money, and marketing budgets and/or outsourced services tend to be at the top of that list. Whether that’s the best approach or not is highly debatable, but that’s the reality of the situation.

There are a lot of articles out there talking about how to approach marketing during a recession, high inflation, etc. However, we haven’t seen as many resources about what people are actually experiencing right now.

PPC professionals are asking questions about the economy, but it’s been difficult to find the answers we need.

So, with everything that has happened with the economy in 2022, what has been the impact on Knucklepuck’s Paid Media department? And how do we feel moving into 2023?

The Actual Impact

“The last 2 years were the most extraordinary in a generation. I wouldn’t say we’re in uncharted waters but it’s certainly unfamiliar territory as businesses come out of COVID restrictions, PPP, shift to remote work, and many other factors.” – Brett Snyder, Knucklepuck CEO

The first trend that we noticed this year was a lot of clients asking for more granular reporting that they can bring to other leadership in their organization. While Knucklepuck already provides detailed data and analysis in our reports, there have been far more questions about specific keywords, products/services, targeting, etc.

  • This is likely due to larger conversations about what marketing channels are and aren’t successfully producing leads, revenue, etc. When hard times are potentially looming, businesses want to know the best place to put their money.

Image of data trendlines

Somewhat related to the first trend, another shift that we’ve seen this year is tighter margins. This causes clients to look to redeploy funds to other channels, some of which are not Paid Media.

  • For example: a B2C brand focusing more on in-store promotions. With CPMs and CPCs rising, ad budgets aren’t going as far as they used to, so other channels may have started to drive a higher ROI.

Lastly, we have lost clients over the past 3-6 months due to their concerns over a recession, inflation, or other economic factors. It may sound strange for a business to admit that, but our goal here is to be transparent about what’s actually happening in the industry.

What Do We Expect in 2023?

Knucklepuck’s biggest economic concerns heading into 2023 are related to staffing/employment and lower investment in Paid Media services. This could include reduced ad spend budgets from existing clients, as well as fewer leads in our sales pipeline for PPC services (which then affects staffing and hiring).

However, while we are concerned about the potential for lower investment, that is not necessarily what we expect to happen. We’re actually preparing for higher investment – but this comes with an important prerequisite.

“The need for a dedicated outbound sales role has become more and more apparent. It’s been difficult to attract inbound leads in the current climate, so we’re looking to invest in a professional resource that will go out there and proactively find and close new business.” – Brett Snyder

Essentially, hiring a salesperson is our plan to drive higher PPC investment. This is the main impact that economic concerns have had on our 2023 planning. Instead of hunkering down and preparing for the worst, our focus is on building the business to have multiple options to achieve growth.

  • This ensures we aren’t betting the future success of the company on what will happen with the economy, and instead we’re betting on our ability to navigate whatever does happen.

Make Your Voice Heard!

This article is the first installation of Knucklepuck’s series on the state of the economy and its impact on PPC.

For the second installation, our goal is to shed light on what the rest of the industry has seen and how other PPC professionals are feeling in this environment.

If you’re interested in sharing your thoughts and experiences, please fill out our brief survey – https://bit.ly/3VfuONZ.

  • There are less than 10 questions, and all responses are anonymous (unless you note otherwise).

We would love your input, and we are happy to give you a shoutout in our next blog for helping us with our research if you are comfortable with it!

Summary

Knucklepuck has seen inflation, recession, and economic concerns impact our business in 2022.

But that doesn’t mean that hope is lost for 2023. We plan to double-down on business development moving into the new year, which will help drive higher investment in Paid Media services.

As always, feel free to reach out on Twitter if you have any additional feedback that you’d like to share!

Can We Help?

If you have an idea, a project or a challenge, we’d love to hear about it.