Stagflation effects on online advertising (part 2)
                     Stagflation effects on online advertising (part 2)
Watson F
Writes on Ad serving, involved with Adspeed ad server 
solutions and Adspeed ad server platform.
In part 1, we described the term stagflation and what governments around the world are doing 
to prevent and control it. We will continue to discuss its effects on advertisers, publishers and 
the whole online advertising industry in general.
Power of promotions
During a stagflation period, inflation runs high while the economy growth is slow. This means 
people are more worried about their future. When people feel like they need to watch their 
spending, they will look for deals, discounts and promotions. This is a good time for businesses 
to use ad serving as a way to push deals and promotions that will attract buyers. Promotions are 
really powerful in moving any existing inventory. The fact of the matter is that everyone is taking 
time to look for those types of deals before parting with their hard-earned money. Yes, things 
have always been that way, but the number of people doing their due diligence before a 
purchase is on the rise when inflation is high, things are expensive and money is getting tighter.
Ad types
As we discussed earlier in this piece, some people will be more careful 
when making expensive purchases of high-end products. We can expect 
this behavior to continue for as long as we stay in this period of 
stagflation and during any economic downturn. The ads that are going 
to be successful will be those that offer essential items, product staples, 
necessities and needed items, such as household goods. Fancy and 
luxurious items are not going to be as popular during this phase of the 
economic cycle because only a smaller and more selective audience still 
has the disposable income to make these big purchases. As an 
advertiser, you should evaluate which products or services to focus on. 
As a publisher, you should create content and match with advertisers 
that are going to thrive during this period of uncertainties.
Importance of ROI
It’s not just consumers who are looking to pinch pennies during these trying economic 
times. Businesses are also being very careful about how they spend their money, 
including the amount spent on advertising. Unlike the R&D budget that is a long-term 
investment, the advertising and marketing budget has a short-term outlook because it 
is often tied to sales. Companies often adjust their ad spending frequently to adapt to 
the current environment. Advertisers are looking more closely at ads that deliver a 
good return on investment. If an ad does not deliver the target level of ROI, it won’t 
be renewed. On the other hand, if an ad reaches or exceeds the target ROI, 
advertisers will very likely renew with future campaigns because they understand it 
takes money to make more money. This concept is not new but it comes into focus 
during lean times. Your objective is to monitor ROIs across campaigns, boost high ROI 
campaigns, improve medium ROI campaigns, and terminate those campaigns with low 
ROIs. To measure ROI, it is important to explore the features offered by your ad 
server, especially the ad conversion tracking functionality so you can understand how 
much sales resulted from each dollar spent.
About Adspeed
AdSpeed ad server is a reliable & powerful ad serving and ad 
management solution that serves your ads, tracks impressions & clicks 
and reports ad statistics in real-time. Driven by the latest ad serving 
technologies, the goal of Adspeed adserver is to provide a reliable 
platform that can help in executing online advertising strategy more 
efficiently. 
Thank you for spending your precious time in reading this article.