Stagflation effects on online advertising
                     Stagflation effects on online advertising
Watson F
Writes on ad servers, involved with Adspeed 
ad server solutions and Adspeed ad server platform.
While we are beyond the worst of the pandemic, we are all well aware 
that things are still a long way off from the world getting back to the way 
it was before COVID arrived. The harsh reality is that we may never see a 
full return to what we considered normal before. There is a lot of work 
to be done before we get to that point of stability. Across the globe, 
there are a number of different issues affecting businesses and 
consumers alike, all of which have to be addressed in the coming months 
and years. One thing that is proving to be an issue at the moment is an 
economic concept referred to as stagflation, which we will get into right 
now as we look at the impact it has on ad serving in general.
Stagflation explained
Stagflation is a bit of a blanket term for a number of things happening at the same 
time. Specifically, we are talking about high inflation rates, rising unemployment, 
and slow or stagnant economic growth. Because of high inflation, central banks 
are raising interest rates to make it more expensive to borrow money and thus 
reduce demand. However, the problem is also on the other side of this equation, 
which is the supply of goods and services. Issues with supply chains are more 
difficult to control because they involve a lot more moving parts and likely take 
time to stabilize. When we have a higher interest rate and yet inflation does not 
fall back to a target level fast enough then economic growth will slow down. If it 
slows down too much, we will have a recession. If demand slows, supply increases 
and inflation goes slower then the central banks achieve their target balance. 
However, it is not easy to do because there are a lot of unknown factors and the 
indicators often lag current data. This is why everyone is taking a cautious 
approach to doing business. There are some things that advertisers need to be 
aware of, so let’s get into that now.
Spending considerations
Given the current rate of inflation and supply chain issues, consumers are going to 
be more than a little conservative with their money. They will feel poorer because 
things are getting more expensive and a dollar does not go as far as it was before. 
Not only do they not have the level of disposable income that they would like, 
they are not always able to get their hands on the products and services that they 
want. Supply chain issues persist longer than many people previously anticipated 
and recent negative developments like the Ukraine-Russian war and other 
geopolitical conflicts did not help. It is a bad combination when things are both 
expensive and also hard to get. Advertisers need to be aware of this situation and 
tailor their ads and pricing to reflect these concerns. Many consumers can no 
longer afford the item or are going to wait so trafficking ads onto adservers for 
high-priced items may not be as effective as they were before.
Part 2 - The power of promotion, ROI and product/market fit
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. 
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