It may seem fun and glamorous but the digital media business isn’t an easy one. Online publishers, companies and content creators are constantly seeking creative ways to stand out from a slew of competitors so they can secure advertising dollars.
Despite their best efforts, there are still casualties and it will only get worse as digital media enters an advertising recession predicted by financial analysts and experts.
The tumbling prices of Snapchat and Twitter stock confirm how challenging the current digital landscape is.
Snap Inc.’s shares fell 38 percent on Friday, one day after the company announced disappointing second-quarter earnings. The parent company of Snapchat’s shares are down 78 percent year-to-date, according to a report by CNBC. It was trading at $10.04 at the time of this writing.
Twitter also failed to meet growth and revenue expectations, declining 1 percent year-over-year as opposed to the expected 10 percent increase analysts predicted. According to an Axios report, the social media giant’s heavy reliance on advertising will hurt the company in the coming months.
At the time of this writing, Twitter was trading at $39.86 per share, down from $42.71.
The problem is exacerbated for Black-owned digital media companies. If large-scale social media platforms like Snapchat and Twitter are taking such losses, more minor, sub-scale Black-owned properties are barely staying afloat.
The old adage says, “If America catches a cold, Black America catches the flu.”
Already faced with discriminatory advertising practices like digital redlining and structural corporate barriers, Black digital media companies are at an even more significant disadvantage when navigating the industry.
“My intimate experience over 16 years in Black digital media has demonstrated America’s advertising complex is structured more like police departments and America’s crooked justice system than advertisers will acknowledge,” Moguldom Nation Founder Jamarlin Martin said in a June interview. “Advertisers and agencies have their own expression of digital redlining, mass incarceration, sentencing disparities and stop and frisk.”
Martin is not alone in his first-hand experience. Mariel Richards, CEO of U.K.-based magazine gal-dem, said despite the flood of promises made by agencies and brands to engage Black-owned media after the horrific murder of George Floyd, there is still little light at the end of the advertising tunnel for Black publishers.
“After everything that came with Black Lives Matter, there are lots of agencies and organizations that are making quick money off of saying they are able to put a badge of diversity and ‘wokeness’ on a brand, without that brand having to actively engage with that community,” Richards told DigiDay. “It didn’t feel just like the normal moving and shaking of the advertising world, it felt much more like exploitation than it would have in any other circumstance.”
Black-owned media has historically received less advertising dollars than their white-owned counterparts. Add a recession to the mix and some may not survive.