On social media, things are especially bleak. According to one study, spending on social media advertising declined from 17% in spring 2023 to 11% one year later. This was the lowest level seen in seven years. The study—authored by Northwestern University professor Koen Pauwels—points to a few reasons, but arguably the biggest is that marketing decision-makers aren’t convinced that social media delivers much.
While companies like Meta have detailed profiles on their users and their interests, its data becomes much more threadbare when it pertains to activity beyond the platform. Meta tells you what brands you have engaged with, but not which ones you have bought. That ambiguity—combined with a few other factors, like consumer advertising fatigue and the crowded nature of social media advertising—shows why many marketing leaders believe social media has a middling impact on their company’s bottom line. Paradoxically, the companies at the heart of this dissatisfaction are doing fine.
We haven’t quite reached the point where there is mass pullback from digital advertising. For those companies that decide to limit their online marketing spend, there are likely others—particularly smaller businesses and startups—that will start advertising through search and social for the first time. These new entrants, I imagine, are what’s maintaining the status quo.
I also believe the digital advertising industry sees the writing on the wall. They can’t be blind to the growing unhappiness of their customers. And so, I believe that the industry will try to distract with gimmicks and fads designed to convince advertisers that these platforms aren’t as decrepit as they seem—that there is still life in the industry yet.
Digital advertising’s dead cat strategy
The Australian political consultant Lynton Crosby is most notable for the creation of the “dead cat strategy,” wherein you deliberately say something shocking or provocative so people’s attention is turned to that as opposed to a misstep or failure. It’s the equivalent of throwing a dead cat on the table at a dinner party; people start talking about the dead cat, not the fact that the chicken is overcooked.
What does that look like in the digital marketing world? Take Facebook: Over the past decade, it has made subtle (and eventually unsubtle) tweaks to the newsfeed algorithm so that content from the person’s immediate network is buried under a deluge of “recommended posts,” all with the aim of increasing engagement.
