In mid-2022, Microsoft stopped advertising on TV after sitting out the upfronts, and Morgan Stanley and Zenith pared back their advertising forecasts. While job gains of 372,000 in June convinced many economists that we’re not headed for a recession, many in the ad industry see otherwise.
A Gartner study in July 2021 found that marketers dropped their ad budgets to 6.4% of overall company revenues in 2021, the lowest level it had been in more than a decade.
While Microsoft is one of the few—Coinbase, Crypto.com and Gemini are some others—to cut their marketing spend, an early sign of marketers pulling in spending can be seen in layoffs, which are considerable.
For instance, Huge, an IPG agency, recently announced it would cut 3% percent of staff, or 37 positions. “We’re seeing clients either cancel, move or pause activities,” CEO Mat Baxter was reported as saying. “We’ve had a significant revenue drop over the second half with clients doing exactly that.”
Among the other firms announcing layoffs are Dentsu (30 staffers let go), Twitter (30% of its talent-recruitment team) and Meta, which has also downshifted the number of engineers it plans to hire by 30%, according to Reuters.
With such sentiment on the rise, advertising jobs will be harder to come by until the economy shows signs of a turnaround.