Navigating the Storm: Ad Monetization Amid Economic Uncertainty

Global economic uncertainty is sending ripples through advertising markets, impacting news sites, mobile apps, and content creators. In first-tier markets like the U.S., U.K., Germany, Japan, and Australia—where programmatic advertising dominates—stress signals are showing. Advertising forecasts have dropped as marketers grow cautious. For instance, Magna cut its 2023 global ad revenue growth forecast to 5%, down from 6.5%, due to worsening macroeconomic trends.

Digital ad spending remains more resilient than traditional media. However, its growth has slowed amid inflation and recession concerns. This report breaks down how economic headwinds affect programmatic ad monetization—from falling CPMs and shrinking budgets to shifts in advertiser priorities—and explores actionable strategies publishers can use to protect and diversify revenue streams.

Economic Uncertainty Squeezes Ad Budgets and CPMs

Starting my “Navigating the Storm: Ad Monetization Amid Economic Uncertainty” post, when the economy stalls, ad budgets are among the first expenses to be cut. During recessions, major brands tighten marketing spend. For example, U.S. ad spend fell 13% during the 2008–09 crisis, with auto and finance leading the pullback. Traditional media suffered most—newspaper ads dropped 27%, radio 22%, and magazines 18%. Digital ads fared better, declining only 2%.

In early 2020, as COVID-19 triggered a sudden downturn, programmatic ad spend dropped 9% year-to-date by April. Travel and automotive ad spend plunged—down 79% and 40% month-over-month. Demand from key sectors vanished almost overnight, leaving publishers with large, unfilled inventory gaps.

CPMs also fell sharply. A May 2020 IAB survey found 62% of publishers faced “significantly or somewhat” lower CPMs. Open web display ads dropped ~34%, and mobile web ads fell 33%. By contrast, social media CPMs declined only 18%. Many publishers responded by cutting rates to attract demand, contributing to a 16% drop in average CPMs for the year.

This trend continues today. In early 2023, YouTube’s ad revenue fell 2.6% year-over-year as advertisers reduced spend, citing economic uncertainty. This marked the third consecutive quarterly decline. Lower demand means less competition in ad auctions, resulting in lower CPMs and fewer high-yield impressions.

Fill rates also suffer. With fewer campaigns running, more inventory goes unsold or fills at remnant rates. During the COVID surge, publishers faced record traffic but lacked ad demand. Advertisers blocked pandemic-related keywords, choking revenue from news coverage. BuzzFeed News reported one brand blocked over 35 million impressions across 100+ sites in March 2020 alone.

Mobile app developers were also hit. In Q3 2023, install ad budgets dropped 20% year-over-year. Fewer campaigns from game and app marketers meant lower fill rates and reduced earnings for developers.

Shifts in Demand Sources and Advertiser Priorities

While total ad demand shrinks in a downturn, its makeup often shifts. Performance-based advertising becomes a priority. Brands under pressure focus on ROI, shifting spend to tactics that deliver immediate results—like search, retargeting, and lower-funnel social ads.

In 2020, marketers cut awareness campaigns in favor of performance media. Social CPMs fell only half as much as open-web display. In 2023, 70% of marketers said they’re more focused on driving sales amid economic pressure.

As a result, spend shifted toward retargeting, e-commerce, and performance video, while high-cost brand campaigns were trimmed. Buyers also started demanding higher-quality inventory and greater transparency.

MFA (made-for-advertising) sites—low-quality pages built solely for serving ads—saw their share of programmatic spend drop from 15% to 4% between late 2022 and early 2024. Advertisers prefer trusted publishers and guaranteed deals (like PMPs), which offer more control and transparency.

Many brands also diverted spend to retail media networks and walled gardens with stronger first-party data and clearer sales attribution. Independent publishers must now compete for limited budget with more ROI-driven buyers and strict quality standards.

Not all verticals behave the same during downturns. In 2008, while most sectors cut budgets, fast food increased spend to gain share. In 2020, tech, personal finance, and home entertainment brands increased digital ads as demand for their products surged.

In 2024, some sectors—such as essential goods and fintech—are still increasing spend to capitalize on cheaper CPMs. Publishers that identify and align with these resilient verticals can fill demand gaps left by retreating advertisers.

Lessons from Previous Downturns: 2008 vs. 2020

Following the theme on my “Navigating the Storm: Ad Monetization Amid Economic Uncertainty” post, the 2008–09 recession led to a broad, slow downturn in ad spending. Print-heavy publishers struggled, and diversification became essential. Digital channels recovered faster and gained share. Advertisers who maintained spend recovered market position more quickly.

The 2020 COVID downturn was sharp and deep but short-lived. Ad spending halted in Q2, then rebounded by Q4. E-commerce and streaming poured money into digital, capitalizing on low CPMs and increased online engagement.

In 2021, U.S. programmatic spend jumped 41%. The crisis taught publishers that fast rebounds are possible. Those who stayed agile and invested in audience engagement were rewarded when budgets returned.

Programmatic CTV grew during the pandemic and proved resilient. CTV ad rates dropped minimally, showcasing the value of emerging digital formats. Publishers also saw the importance of addressing brand safety fears through better ad tech and content classification.

History shows advertisers cut waste, seek efficiency, and return with new priorities. Publishers who adapt and diversify revenue streams tend to come out stronger.

Current Trends: Data-Backed Insights from 2024–25

As of 2024, advertising in top markets is cautiously optimistic but restrained. Growth is slow—the U.K. reported its slowest digital ad growth since 2009. U.S. internet ad revenues grew 10.8% in 2022 but down from 35% growth in 2021.

Marketers are planning quarter-by-quarter, not annually. Flexibility is key. Brands are ready to scale budgets up or down based on sales and economic news.

Performance remains a top priority. A 2023 survey found 70%+ of marketers are under pressure to prove ROI. Programmatic spend is flowing into performance-driven formats like social commerce, affiliate marketing, and search.

Retail media networks—like Amazon and Walmart—are thriving. They link ad spend to purchases, making them attractive in a tough economy. This growth is happening even as open-web display slows.

Ad quality and transparency matter more than ever. Advertisers want impressions to work harder. Attention metrics, viewability standards, and better placement are all hot topics.

The crackdown on MFA sites continues. In 2022, 2% of sites captured 11% of spend. By 2024, that number dropped to 4%. Advertisers want effectiveness, not just volume.

Brand safety tools have improved, using semantic analysis to avoid harmful content while allowing responsible news monetization. Yet sensitivity remains high, and demand partners still use strict filters. Publishers must meet high standards to remain monetizable.

AppLixir Rewarded Video Ad Monetization

In this landscape, rewarded video ad formats are a bright spot. They offer clear value exchange—users watch a video, and publishers earn revenue. Advertisers see strong engagement and completion rates, making rewarded video an efficient format in a performance-first market.

Platforms like AppLixir are helping mobile developers and HTML5 game publishers monetize via rewarded video ads for websites and web games. These ads maintain strong CPMs even when open display formats fall, providing a reliable revenue stream in uncertain times.

Rewarded ads work well in games and apps where user opt-in is key. They avoid ad fatigue and boost ARPDAU, especially for free-to-play titles. As advertisers seek measurable ROI, rewarded video monetization continues to grow in relevance.

While programmatic ad markets remain volatile, the path forward is clear. Publishers must adapt to shifts in advertiser priorities, focus on performance-driven formats, and improve inventory quality. Understanding macro trends and diversifying revenue sources—especially through rewarded video ad platforms—will be critical.

In downturns, agility wins. Those who experiment, optimize, and offer clear value to both users and advertisers will come out ahead.