Online Advertising During a Recession (Andrew Chen)

Andrew Chen (a16z) on five trends for ad-based startups as the 2020 recession began.

Why it was kept

Kyle’s notes keep the core bet: the shift from offline to online is a wave with plenty of room left, hard times push people online, and when marketing budgets shrink, measurable channels win.

As Kyle captured it

• Read Online Advertising During a Recession by Andrew Chen at a16z
  • The shift from offline to online feels like a huge wave to be a part of (still feels like there is quite a bit of room left for growth in that transition)
  • Why, in hard times, do people shift to online?
    • The current Coronvirus crisis exaggerates possible reasons for the move, like the fact that brick-and-mortar doesn’t exist when the country is on lockdown
    • The more standard reason is the fact that online can more clearly communicate the ROI in a way that offline advertising can’t
  • “The point is, **when your marketing wallet shrinks yet the market gets even more competitive, then companies in crisis will start incorporating methods other than the tried-and-true. **Even though a lot of brand-based advertising has horribly opaque measurements – clickthroughs, surveys, and other gross metrics don’t provide much – it’s still better than the TV ad sales guy who asks for huge upfronts without providing much in transparency.”