Make no mistake, as 2023 ramps up, we are already in choppy economic waters. With interest rates continuing their rise and inflation still high, costs for consumers — and especially businesses are going up. As a result, most marketers are being confronted with the need to throttle back spending to prepare for a difficult year ahead.
I know we at EDO are. And as we kicked off the year meeting with senior industry leaders at CES, I heard directly from marketing and media leaders unanimously that everyone is facing a prove-it-or-lose-it reality this year.
And not a day goes by that we don’t hear from our industry partners about the increasingly challenging decisions they have to make. Some plan to cut or pause ad expenditures completely, hunker down, and hope their cash flow will see them through to the next bull economy. Others are trading locked-in, better rates for a more flexible investment in the future. And a few aggressive ones are holding the throttle, playing a game of chicken to squeeze out market share gains before hitting the brakes.
Those are all fine options, but they’re overly simplistic ones.
Fear makes all of us question the decisions we’ve already made and will need to make during turbulent times. It’s not the recession we’re all afraid of. No, it’s deeper than that. We’re all afraid of making the wrong decisions and finding out too late to do anything about it. Pulling back, waiting to see…these are all versions of doing nothing. Because doing nothing is safer than making a wrong move.
Now, I’m a big fan of strategic procrastination – time can be your friend. But often doing nothing is the wrong move.
Fundamentally I believe the best way to weather the coming storm isn’t to do nothing (OK, let’s be more generous: “To make your media work harder”), it’s to lean into the modern marketers’ performance practices: test-and-learn, monitor everything — all the time, and optimize.
I’ll explain.
Make a thoughtful cut, not an impulsive one
Right now, your instincts are telling you to take a year off and figuratively (perhaps literally) take your ball home and just walk away. But we all know we can’t do that. We all have businesses to support — entire ecosystems and people — depend on us to make the right calls that continue to support our brands and demand for our products and services. But we all face pressure to cut something, and soon. The real question is: where?
For starters, it’s time to expect more tangible outcomes from your media plans and prove that your TV advertising is working to drive demand. It’s getting answers to questions like, “what’s driving tangible outcomes for my business?” And not just pre- and post-campaign consumer surveys but from real consumer behavior in flight. Don’t wait weeks or months after your media has aired. No, in real-time, so you can move forward confidently and with eyes wide open, fixing problems as they happen, and taking advantage of opportunities – all possible when you know what drives engagement with your brand.
You can’t afford to cut what’s working. But you have to know what’s working to avoid what’s not.
Want a first look at our upcoming white paper on making intelligent cuts? Sign up for your copy as soon as it’s ready.
Optimize your spending, don’t diminish it
While any combination of “spending” and “recession” may seem counterintuitive, recessions can be great times to take advantage of a brand AND performance medium like TV. Prices are lower, competition is pulling back, so there’s an opportunity to take advantage of a lack of clutter. But the move here isn’t to scoop up all the unsold inventory now available to you. It’s to find out which inventory matters most for your business. And the most effective way to do this is by optimizing TV spend — in other words, doing more with less.
This means getting granular with your media mix and leveraging only the inventory that provides the most active engagement with your message and is the most likely to convert. Advertisers don’t need to spend more money on more reach because changing your media mix need not cost anything. If anything, advertisers can save money by buying lower-cost spots with similar or even better consumer engagement.
Move into the new year with the intent to thrive
While risk aversion may seem natural, even smart, in times of uncertainty, those who still manage to make their numbers often do so by doing something different — not necessarily bigger or better, but something truly new and innovative.
Whether you’re considering changing rotations, looking for wear-out data, or simply wanting to gauge what’s working, you’ll need to have the data to help you make smart choices for your business. That’s always been important to us, and it always will be.
As businesses move forward into the new year, the margin for error will weigh heavily on every decision we make, which is why you need to ensure your company has all the data it needs to thrive in the new year.
We look forward to watching (and hopefully helping) you succeed.