Is the fate of digital advertising a sign of things to come?

digital advertising
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The fate of digital advertising seems to be sealed, at least for now. There were always questions about its effectiveness, always questions about the industry itself and always questions about the companies that used it and make their fortunes from it.

During one of the market crashes in the 1980s, someone said you should ‘never mistake talent for a Bull market’. They were right but whether any sector can find their way through the current mess is unlikely. How far we will fall is unknown. That digital advertising, and companies that feed on it, will join those falling seems inevitable.

The rule book for digital advertising, amongst other things, just got torn up. That companies like Juniper Research are still sending out summaries of their predictions is brave, to say the least.

When a press release arrives putting numbers on the state of eRetailing (for instance) for the next five years you know it will be wrong.

China’s eRetail sector will grow 63% between now and 2024, Juniper says. Retail transactions will reach $30.8 trillion in the same time frame and the value of eRetail transaction will grow 43%.

As an example, this would have been fine even three short weeks ago. Yet in those weeks, the world has changed and will probably not change back. At least not in the way that we knew it ‘back then’.

Yes, we will all need physical goods but it is in enormous doubt as to whether we will see recent growth curves of associated statistics continue.

Already, we are seeing arenas like digital advertising go quickly from a taut string between supply and demand to a flabby mess that makes little sense. As Richard Windsor points out, companies that rely on digital advertising are having to support their sites, systems, staff and processes without that revenue. Meanwhile, ironically, shares in Facebook and Google rose – presumably based on the fact that users will need them now more than ever. That becomes untenable very quickly.

Meanwhile Governments are doing the only thing they have left to do. Print money, money not backed by anything more concrete than ‘we are a Government’ so that’s OK.

Facebook may finally have met its nemesis. We have predicted its demise on a number of occasions, based on the fact that a company that size with a one-sided business model makes no sense.

And when the one side that is supporting the business evaporates, then the house comes tumbling down.

The trouble is that when the Facebook house collapses, it will very likely take a lot of others with it. It may turn out that the fate of digital advertising will lead the fate of many other arenas in the weeks to come.

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