Raymond James analysts hosted an online advertising conference call earlier this month with an industry expert who has visibility into about $2 billion in ad spending across Fortune 1,000 advertisers.

The expert expects about 25% year-over-year growth in 2022 for online advertising, down from 30% initially.

Platforms exposed to direct response advertising are expected to hold up better. The expert noted that Google Search had fairly stable growth rates in Q2; whereas Meta a modest slowdown in growth rates in Q2 with somewhat lower return on investment (ROI).

The expert also noted expecting an increase in traction with Reels and believes Facebook is best positioned to improve its targeting and measurement given its scale.

Key takeaways from the call include a modest decline in 2022 ad budgets due to inflation impacts on the consumer, Russia invasion on Ukraine, and supply issues.

J.P. Morgan estimates cuts for online advertising companies, pointing to a weaker operating environment in the second half of the year and into 2023.

“The overall macro environment has deteriorated since 1Q earnings with inflation reaching a 40-year high in May, fuel costs up 45% since early February, & Chase (credit card) data indicating slowing consumer spending & lower consumer confidence,” according to one media outlet, citing J.P. Morgan Managing Director Doug Anmuth and team.

J.P. Morgan cut estimates and price targets on 26 companies in its Internet coverage, “due to company-specific dynamics along with broader economic and foreign-exchange pressures.”

The firm also suggests a 66% chance of an economic recession during the next two years, and an 83% chance looking out three years.

Ad agencies at WPP, Interpublic Group, and Publicis Groupe have cut global ad estimates between 1% and 3% this year, with further downside risk in case of a recession, they noted.

Direct-response advertising will “hold up better” through the economic slowdown that is expected to hit online advertising industry this year and into 2023.