Possible fear of economic recession is looming over US and subsequently the effects are spreading over the country’s, those are net exporter to US like India, Japan. US as well as Asian stocks are plunging on a regular basis showing weak sentiment of consumers and investors. Successive interest rate cuts falling short to boost the investors sentiment and expenditure level so that economy can avoid recessionary pressure.
Question: What would be the possible effects to the Search Marketing Industry as a whole worldwide?
If recession hits US economy in reality, search marketing industry has to analyze the effects from now onwards.
Economic recession pulls down the investment levels, results in job cuts, weak consumer and investors sentiment, poor company performance in terms of lower profits, stock market tumbling as investors withdraw their last resorts of investments and so on. Lower interest will flush the economy with money instead of boosting the economy, higher inflation emerges and that will be another problem of Stagflation.
The effects will percolate worldwide as each market is interlinked through money market, FII activities. Companies those are dependent on US from the rest of the world, would likely to see a slowdown of their growth as well.
Search Marketing firms and companies would receive a serious damage with the effects described above. Search would have no meaning at all if there lesser buyer to shop. Lesser clicks in turn-> Lower customer base-> Off line database marketing would also be affected. This may reduce different channels of revenue generation. One step ahead it can be predicted that search marketing would be one of the worst hit as this segment deals mostly with the luxury and semi-luxury products. Listed companies would be affected with lower profitability channels.
The internet giants sees the threat and penetrating to other emerging economies. They are in fact building the base to overseas as things are developing at a slower pace there.