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Can a Loss of Confidence in Digital Advertising Cause Financial Market Fallout?

What? Market observers are sifting through the financial tea leaves for years trying to find subsequent “black swan,” that the majority extraordinary and unlikely event which will cause the financial markets to tumble. Dozens of possibilities ranging in scope and scale are found everywhere the map, literally: Euro zone, China, Japan for his or her challenging economies; North Korea , Russia, Iran, Syria, Venezuela for his or her geopolitical implications; stock bubbles, bond bubbles, automobile loan bubbles, student loan bubbles, bond and pension bubbles, then forth.

What about the bubble in digital/online internet advertising? Many recent advertising in Iran and prospective fortunes are tied to the continued rapid rise in digital advertising, but bumps seem to be shooting up along that otherwise clear path. Recent reports are that a big share of “customer clicks” is that the results of “bot traffic” (internet robots), not actual customers. Estimates are that companies have lost quite $16 billion thanks to ad fraud this year alone. Even more significantly, it might appear that corporate America is starting to question the effectiveness of digital ads as a marketing tool. Proctor and Gamble recently reported that notwithstanding its decision to scale back its online advertising budget by $100 million within the June 2017 quarter, the corporate saw no difference is sales. Those trends should be disturbing to stakeholders within the digital ad business.

So, what is the big deal? the very fact is that since the start of this century much of the robust economic process of mature global economies in many industries has come from the expansion of the web , in a method or another. Much of the optimism about future economic process stems from its continued expansion. the matter is that much of that activity is purchased with revenue from digital ads, and therefore the fate of the many of the fastest growing and most precious companies on earth, like Google and Facebook, are tied to ad revenue growth.

Online advertising is here to remain , but what if the prospects of its growth are tarnished, diminished or, worse yet, more companies get the heretical idea to scale back their online advertising budgets? Digital ad spending is approximately $200 billion globally now and expected to grow quite 50 percent within the next three years. The mere hint of a slowdown therein inexorable rise in digital advertising could have severe ramifications for several companies, and by extension, economies and financial markets. Time will tell if such a heretofore unimaginable reversal of fortune and loss of optimism therein business can cause meaningful fallout in global economies and financial markets.

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