Advertising as an industry tends to closely track with the broader economy, at about 1% of GDP. As such, macroeconomic headwinds like we are experiencing today tend to translate into a slump in the advertising market. With the slump often comes advice from the industry about how to best navigate the downturn—often the same advice that was shared in the last downturn.
Given that the advertising market is always in flux, it’s interesting to look at what’s the same in this downturn, as well as how it differs from previous downturns to help advertisers and the larger ad tech industry emerge on the other side stronger than ever. Consider these four expert tips to optimize advertising effectiveness and navigate advertising downturns:
1. An ad market downturn presents opportunities
One classic piece of advice reminds you not to turn off advertising in a downturn. In fact, an ad market downturn is a good opportunity to grow market share, because your competitors may be reducing their ad spending, leading to both lower rates on advertising and an opportunity to increase your share of voice.
When deciding where to invest your media dollars, a downturn puts pressure on marketers to focus on down-funnel marketing to drive sales in the short term. This is counterproductive, however, as a full-funnel strategy that includes upper-funnel brand advertising to drive metrics such as awareness and consideration can increase ROI overall and decrease the cost of lower-funnel activation.
2. Ad measurement is essential
Another common imperative in a shrinking ad market is that ad measurement is more important than ever. Although you shouldn’t drastically cut your marketing spend, you sure don’t want to be wasting that spend. If you can trim the part of your budget that’s not working well, you can often maintain advertising effectiveness while saving money.
So, advertisers should invest in verification solutions that prevent inventory that’s fraudulent, non-viewable or brand unsafe. They should understand and keep control of frequency, making sure they’re not wasting spend by reaching the same people to the point of creative wearout. Investing in effectiveness measurement that’s aligned to the type of media used is a must, whether it’s upper funnel, mid-funnel or lower funnel. Finally, advertisers should invest in measurement technology such as data clean rooms and systems to handle the vast amounts of data produced by modern ad campaigns.
3. Take advantage of emerging channels
CTV is the best brand-building channel in history, combining the immersive storytelling of TV with the granular targeting of digital. In an environment with shrinking budgets and the need to maintain and invest in your brand, CTV allows you to engage in a more focused brand building, targeting those who are most important to persuade.
All economic downturns are unique, however, and when taking tried-and-true advice into consideration it’s important to keep in mind how things have changed this time around. This is the first downturn since the post-COVID connected TV (CTV) explosion. In addition, a tight economy may drive more consumers to switch from ad-free streaming to ad-supported tiers and free ad-supported TV (FAST) channels, which may accelerate the importance of CTV ad budgets.
4. Rely on retail data to learn about purchasing behaviors
On the lower-funnel side, retail media has exploded in recent years. Retailers have always sold advertising in multiple ways, from end caps to co-op ads, and retail media has used modern data platforms to bring that online. In the current environment, where there’s pressure to tie advertising directly to sales, retailers bring direct data about purchasing behaviors. They also sit close to the sales themselves, allowing a tight feedback loop that suppresses ads quickly after a purchase has been made, preventing wasted budget and annoyed consumers.
Remember the advice about measurement, though, and make sure retail media is driving incremental sales, and not just advertising to those who will purchase anyway.
Navigating this advertising downturn will require listening to the wisdom passed down from previous cycles while also incorporating what has recently changed in our industry. Doing so empowers advertisers to hit the next boom with agile systems and processes that are proven to stand the test of time.
To learn how your organization can improve ad effectiveness with the Data Cloud, see Snowflake’s 8 Ways Brand Advertisers, Ad Agencies, and AdTech Companies Can Boost Insights and ROI with the Media Data Cloud.
from Digital Marketing Education https://ift.tt/ZjJtbhX
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