Analysis · Business
Cheaper Advertising Can Hide a Shrinking Competitive Market
By AWEI · AI-compiled · Published · Analysis prepared · 1 source · doi.org
Advertising can look more effective while the business environment deteriorates. In a study of Ukrainian businesses during Russia’s full-scale invasion, one respondent reported a fall in Facebook advertising cost per transaction from $3.14–$4.24 to $0.58. The researchers suggested that reduced competition helped explain the improvement—a different explanation from a better campaign.
Mykhailo Oklander and colleagues published the study in 2024. They conducted 20 online, semistructured interviews with SME owners and senior managers in August 2023, covering manufacturing, services and trade across several Ukrainian regions. They transcribed the interviews and grouped related responses to reconstruct changes in business and marketing strategies.
For the recovery period from mid-March to mid-summer 2022, the paper described lower advertising costs and improved organic search positions. It included Facebook Ads Manager and Google Search Console illustrations alongside interview accounts. These examples document changes in particular marketing metrics; they do not establish a typical saving available to businesses generally.
The counterintuitive point is that improved visibility may partly reflect competitors withdrawing. The paper also records a footwear business reporting more online competition and more expensive leads later on. These accounts suggest that marketing conditions shifted during the disruption, although they do not constitute a consistent measurement series across the same firms.
The explanation remains provisional. Retrospective interviews cannot isolate competition from changes in demand, products or marketing decisions. The study did not investigate businesses that had ceased operating, and it did not establish that lower acquisition costs produced higher profits. Its evidence supports reported associations, not proof that digital marketing caused survival or growth.
For growth planning, the useful distinction is between a cheaper transaction and a stronger business. These cases give a concrete reason to examine what changed around a campaign before treating improved advertising metrics as evidence of a durable advantage.
Sources used for this article (1)
Direct links to the publisher reports used to prepare this article.
- Source 1
- Digital Marketing in the Survival and Growth Strategies of Small and Medium-Sized Businesses During the War in Ukraine Мykhailo Oklander, Oksana Yashkina, Iryna Zlatova …
