With the ongoing economic crisis, it would seem an easy solution for businesses to save money is to pull back on ad spend. However, this would be ill-advised. At a time when revenue is needed most, business leaders must avoid an overcautious knee-jerk strategy, as opportunities to strengthen revenues and customer loyalty are likely to be missed.
To maintain stability during this turbulent time, LiveRamp’s Travis Clinger, SVP Activations and Addressability recommends three key business strategies:
Continue to invest in media
In 2020, a leading beverage company cut its budget by $2bn dollars in response to uncertainties with the pandemic, leading to a net revenue loss of 11%. Meanwhile, a direct competitor increased its ad spend over the same period and secured a 5% growth for the year. This confirms that pulling back on media spend during an economic downturn can have negative impacts on business stability.
Media investments into strategically-targeted audience segments offer a big opportunity for marketers who’re looking to maximise their budgets. Those who remain committed to their investments, and deliver the right message at the right time, will have the opportunity to not only rebound quicker but also to increase their market share as they stay visible in the consumers’ mind.
Now is also the best time to experiment with direct consumer relationships. Explore the benefits of first-party data and how to collaborate with trusted partners in a privacy-safe manner through data collaboration solutions such as LiveRamp’s Safe Haven, favoured by retailers including Boots and Carrefour. Emerging channels, such as connected TV (CTV), also offer huge opportunities to engage on a one-to-one basis with consumers . Extending the value of first-party data by activating it in new channels such as these will provide a more personalised and seamless interaction with customers both in and outside “the four walls” of a business.
Get closer with media agencies and partners
In an economic downturn, reliable partners are critical. Working closely with your media and agency partners will ensure cost-efficient strategies. It’s really important that these partners are briefed on achieving business outcomes to ensure marketing spend is optimised and working harder than ever before. A clearly measurable and transparent media buy will enable teams to delve into the data and drive real-world conversions.
Contemporary media investments should be addressable, accountable and measurable. While some advertisers might be concerned that the ongoing browser policy changes from Google will lead to higher acquisition costs in reaching target audiences, the reality is that third-party cookies have always been limited in terms of their effectiveness. Pseudonymous, privacy-first identifiers meanwhile will provide marketers with reach and stable advertising measurement online and offline.
Get ready for the recovery
It’s important for marketers to remember that the cost-of-living crisis does have a shelf life. While the present demands strategic and bespoke planning, business leaders who keep one eye on the brighter future will be ready to reap fresh opportunities when they come in.
Addressable channels are highly flexible and agile due to recent advancements. Channels including mobile, search and even CTV are making it possible to calibrate ad spend for performance with deep granularity. Programmatic, omnichannel media buying allows advertisers to pivot with agility in line with market conditions.
Marketing through a recession will test the most seasoned business leaders, but those who maintain a stable level of marketing investment will enter the recovery period in a very good position. Marketers must leverage privacy-first addressable reach to optimise first-party data strategies, within walled gardens and on the open web. Marketers must focus on omnichannel targeting, and enhance the measurement and analytics of marketing campaigns.
For more insights into how to spend smarter in a challenging economy, take a look at LiveRamp’s playbook here.
A version of this article was published in WARC