The Impact on the Advertising Market
Recessions put a crimp on R&D spending, but they really do a number on advertising budgets, which are highly sensitive to changes in economic cycles. According to Robert G. Picard, considered by many to be the father of media economics, a decrease of 1.15 percent in the gross domestic product, a measure of national income, leads to an average decrease of 5.98 percent in advertising budgets, as illustrated in the following graph.[160]
While the strength of the correlation between recessions and advertising spending differ among countries (from very strong in Germany, Finland, the United Kingdom, France, and the United States to almost nonexistent in Japan), the correlation will be significant in Google's main ...
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