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As the sector tries to figure out what will happen in 2023, the word "recession" is being used more frequently.
As inflation increases, banks raise loan rates, and fuel prices rise, analysts are increasingly taking a decline in consumer confidence into account, which will have an influence on ad spending.
Investment banks are lining up to warn that the state of the economy poses a threat to the amount spent on advertising, claiming that it appears that "ad revenues will be harmed" as a "consumer recession looms."
The Commonwealth Games, which will take place in late July or early August and are expected to boost television spending, the return of the travel bug as borders open, and the resurgence of cinema and outdoor media all contribute to the local market's resilience in the face of economic concerns.
The recent economic volatility is beginning to have an effect on the advertising business, according to a research paper from Bank of America in the US.
Although businesses who invest during a recession sometimes come out better, the market is sluggish because of advertisers’ worries about labor shortages, inflation, and supply chain problems.
The Cannes Lions awards reflected this. Concerns about the global economy and the conflict in Ukraine were never far from the surface at this week's Cannes Lions International Festival of Creativity, according to The Wall Street Journal.
Robert Bakish, the CEO of Paramount International, recently told analysts that consumers and businesses alike are clearly very concerned about inflation right now.
In times of high inflation, we think that the diversity of our business—again, this mix of broadcast, cable, theatrical, streaming, etc.—is a relative benefit.
"I'd also like to mention that historically when consumer confidence has been a little shaky, entertainment, including streaming and theatrical entertainment, has done well because it offers a wonderful value for customers attempting to avoid the high cost in other ways, other sectors.
Advertising is currently choppy and does have some exposure to the economy and inflation, but our best-in-class offering, which effectively combines those platforms in a turnkey manner and adds creative capabilities and incredibly popular content from around the world, will help us maximize share in this period.