This Should Get Interesting

Because of the ongoing supply chain issues, a number of companies are unable to meet demand, and they are considering cutting back on advertising.

What is interesting here is that they are likely going to be conducting a real world experiment as to the effectiveness of advertising.

What happens if some of these companies find out that the return on advertising is not what was promised?

If we see major pullbacks in , the economic ripples from this could be interesting:

The global supply-chain crisis is spreading to Madison Avenue.

Many companies have been struggling for months to get products to consumers, as they face shortages in everything from raw materials to labor to cargo containers, among other problems. Some are questioning whether it makes sense to promote products they can’t adequately stock.

“It’s not wise to drive demand when shelves are bare,” said Susan Cantor, chief executive officer of branding firm Sterling Brands.

Chocolate giant Hershey Co. and household-goods manufacturers Kimberly-Clark Corp. and Church & Dwight Co. in recent days said they cut back on ad and marketing spending in the third quarter because of supply-chain issues.

………

Church & Dwight, the consumer-product company behind the Arm & Hammer and OxiClean brands, said Friday that it pulled back on third-quarter marketing for products most affected by the shortages, especially household products. The New Jersey-based company said it expects supply-availability issues to begin to abate in the first half of 2022 for most of its brands.

………

“I think large media organizations are going to see short term significant impacts in these categories until the supply-chain issues right themselves, which should be early in 2022,” Mr. Wagenheim said in an email. Some digital publishers are planning for ad spending to shrink by at least 5% in the fourth quarter compared with their previous projections, according to media executives.

………

Ad-holding companies, which work on behalf of big advertisers, appear largely unaffected so far by the supply-chain bottlenecks.

Given how our society is completely permeated by advertising, and the possibility that there would be a pullback from the current state of affairs fills me with glee.