Good News: Some are Planning for a Recession (Or, Now I Can Finally Put My Economics Degree to Use)
You know that we're in the business of selling advertising here at ArcaMax. What you might not know is that we buy LOTS of advertising ourselves.
Our media buying department has one clearly defined mission: drive traffic to our subscription lists and websites. This increases the number of people who will see the advertising sold by our sales department and this directly impacts our revenue. More readers means more ad impressions which translates into more revenue.
I don't think I've divulged any trade secrets yet -- this is the model any company generating advertising revenue online follows. And the price of ad inventory is driven by the forces of supply and demand, whether we're buying or selling.
Now here's the "good news": many experts are predicting economic trouble ahead for a variety of reasons (gas prices, housing credit crisis, etc.) As a result, the natural reaction for many in business is to tighten their belts and stop spending money, which is behavior that helps create exactly the situation everyone is hoping to avoid, a recession.
Now, what does all of this economic theory have to do with online advertising? In my opinion, it sets the stage for a great buying opportunity for companies like ours who buy media.
Here at ArcaMax Publishing, we have a frequently-repeated saying that "Advertisers advertise… that’s what makes them advertisers." If companies in competition with our buying department cut back fearing a recession, that only helps us. We should be able to get more inventory and hopefully at better rates. As we noted above, this in turn grows our inventory and gives us the opportunity to make more money.
Naturally I'm not hoping for a recession, but rest assured that we'll be in the market grabbing as much market share as we can if things do slow down economically.
I encourage your company to approach your media buying budget in the same way, whether you're buying our ad space or buying elsewhere. Maybe your direct competitors will slow down and play "safe" – rejoice! Take this opportunity to increase your market share. Please let us know if we can help.
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