Every crisis, whether national or global, is a test for the economy. In recent years, companies around the world have felt the full force of this. The fall in the value of the euro and the Covid-19 pandemic have led to many companies losing money or even having to file for bankruptcy. The war in Ukraine was another drastic experience. All of these issues have also had an impact on marketing and, as a result, on advertising expenditure and income.
Economic burdens and concerns
Corona and the war in Ukraine have of course not gone unnoticed by German consumers. A theater of war just 1,000 kilometers away and the resulting uncertainty are increasing concerns about unstable supply chains, inflation, shortages of goods and rising energy prices. High prices in particular have forced 31% of Europeans to cut back on heating, showers and television. One of the biggest concerns for the future is the fear of a shrinking economy.
The Russian invasion of Ukraine on February 24, 2022 had a dramatic impact on the advertising industry.According to a forecast by Insider Intelligence, advertising spending in Central and Eastern Europe will be severely affected. The region, which includes Ukraine and Russia, recorded significantly less spending on media advertising in 2022.This is set to increase again slightly in 2023 - but the adjusted estimates are well below the forecasts from 2021. However, the advertising market in Central and Eastern Europe will also shrink significantly.
The forecast comprises two scenarios - a "moderate" and a "severe" forecast. The severe forecast assumes that the war in Ukraine will last longer. Based on current developments in the Eastern European country, it can be assumed that the severe forecast is more likely.Crisis as an opportunity for change
The long-term consequences of the coronavirus crisis are still unforeseeable, but we are slowly beginning to perceive the situation as "normal" - including positive situations. The pivotal point is the trend towards digitalizing work processes. This has resulted in increased demand for secure internet use, cybersecurity and connectivity. Many companies had to take a closer look at their digital offerings and tap into new potential.
If companies want to remain profitable and fully exploit their potential, they need to stay active! We have summarized three key points for you to use the crisis as an opportunity:
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Many companies cut their marketing budget when a crisis is imminent. However, marketing can always generate more sales. Therefore, think carefully about whether budget cuts in marketing make sense or whether savings can be made elsewhere.
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When companies cut budgets, more advertising space becomes available - and it's cheaper too. The chance for your company to advertise more cheaply. The more competition there is in your industry, the more expensive the advertising space becomes.
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Placing successful ads is now a bit of a science in itself - which is why many people avoid the effort and don't even get involved. However, it's worth it and you can also benefit from lower prices due to the current crisis.
Conclusion
The effects of crises on each individual are completely different and their extent should not be underestimated. However, despite all the negative consequences, crises also offer new opportunities. For example, it is clear that there is less competition in various business areas. It is essential to seize the opportunity here to quickly establish a good position in the market. The digitalization driven by the coronavirus pandemic should also be seen as a positive factor.
