Ad Spend Levels, Big Tech Legal Woes, and Amazon Fall Prime Day – The Catalyst with Brad Costella

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Hi, this is Adlucent’s September edition of the Catalyst. I’m Brad Costella, Sr. Director of Strategy, and I’ll be covering the top trends coming out of September and what we’re watching for through the rest of the year. Today we’ll talk through three points: ad spend leveling off over this summer, legal and user trust troubles plaguing big tech, and the just announced October Prime Day early access event.

1. Ad Spend Levels

For the last three months, overall ad spending growth leveled off and was down year over year, with a 3% decline in August. This performance is likely due to the uncertainty in the economy, a lack of more significant sporting events this summer compared to last, inflation causing consumers to decrease spending, and privacy regulations beginning to hurt some forms of digital ads.  

While overall spending is down, digital spending is still growing, with a 6% increase in August. And as digital spending surged during the pandemic, some forecasted a delayed shift in online shopping. The split between online and offline buying has returned to pre-pandemic levels, and ad spend geared toward ecommerce has tapered off.

We’re seeing the most substantial growth right now in search ad spending. As privacy changes impact upper funnel and social formats, especially for performance marketers, more ad dollars are directed to the conversion action in search. Additionally, consumers are pulling back on buying, while demand generation in more push-type channels is becoming increasingly complex.

2. Big Tech Legal + Trust Troubles

With the rollout of Apple’s App Tracking Transparency (ATT), the digital advertising industry is starting to feel its effects. 

Facebook struggles to provide reliable, effective campaign targeting and optimization as advertisers continue to pull back on ad spend. The social media conglomerate forecasted that ATT could cost them $10 billion in revenue this year. And to top it all off, Meta is facing a class action suit for allegedly building in a workaround to its in-app browsing functionality. 

Additionally, Google lost an appeal against a $4 billion fine levied against them by the EU antitrust court for quashing competition. A US-based state-level antitrust case against them is advancing in the courts, and rumors of a federal-level case are becoming more and more likely, with a potential suit looming. 

It is becoming increasingly likely that real antitrust action will be taken by Google, which could mean splitting up or selling off its ad tech arms. This action could have far-reaching impacts on marketers many are reliant on the consolidated ad stack that Google has diligently built over the last several years. The only silver lining for the platforms in any of this is that a judge just dismissed any antitrust claims against the so-called Jedi Blue deal that was struck between the two firms.

We’re also starting to see these themes play out at the user level too. Recent Insider Intelligence data shows that user trust in social media platforms is at an all-time low, and Facebook, in particular, has seen a 12-point decrease in user trust over the past 2 years, with only 18% of users agreeing that the platform protects their privacy and data. 

More than 50% of users report seeing more ads on the platform, and 29% of the time, these ads don’t match their actual interests (likely due to tracking limitations stemming from ATT). Facebook, has a big uphill battle to win back trust and ensure they’re keeping the large lead in active users they’ve built over the past decade.

3. Amazon Prime Day Early Access Event

October 11th and 12th will be the Amazon Prime Early Access sale – two days of heavy discounting across categories for Amazon Prime members. This October Prime Day will force retailers to offer significant discounts to stay competitive. For more info on how this new retail holiday will impact the entire season, download our 2022 Holiday Outlook whitepaper.

Conclusion

That’s all for this month, thanks for watching. Follow Adlucent on LinkedIn, and subscribe to our blog for more relevant and timely performance marketing insights. Make sure to check back in next month for October’s key takeaways to inform your Q4 strategy.

Are you interested in how you can partner with us on your digital marketing performance endeavors? Let’s chat.

Brad Costella

Brad is a Senior Director of Strategy at Adlucent. He is a strategic, data-driven, solutions-focused marketing leader with 10+ years of experience in omni-channel digital marketing and customer acquisition. He has a passion for turning insights into actionable strategies that improve real world outcomes for advertisers and customers. He believes that success comes from finding and striking the sweet spot where customer's needs intersect with a brand's value and goals.