U.S. consumers are feeling the weight of a slowing economy and uncertain environment therein. Inflation is still high, with consumer prices rising 8.3% from a year earlier. Wavering consumer confidence, plunging stock prices and signs of a recession are all pointing to economic uncertainty.
During these unstable times, it’s easy for CPG brands to feel the need to drastically reduce advertising spending. However, marketers need to be careful — this can significantly hurt the brand, and ultimately sales, in the long run.
Instead, the key is ensuring that a brand’s advertising dollars are generating optimal returns. Additionally, those ads are finding the right audiences. By knowing which advertising funds to prioritize and which tactics to cut, brands can make the most of their budgets. This maintains brand visibility and stays connected with consumers while weathering any economic storm.
Eliminate Ads with No Target or Return
It’s times like these that remind brands to reassess their tactics and determine which strategies are working and which need to be cut. Budget reductions may be imminent, which means marketers need to figure out what didn’t generate the optimal return on ad spend. This can be done by looking at past campaigns, reviewing results, and using those findings to cut out what’s not working.
For example, brands may think that generating a broad campaign across multiple advertising channels is a good approach. But when they take a close look at what’s driving purchase intent and sales, they may see that this “spray and pray” approach doesn’t align with their desired KPIs.
Another key indicator of which advertising funds to cut is whether or not the ads are targeting the right audience. Marketers must hone in on who they want to target. Then, reach the consumers who would be most receptive to their messaging. They must also ensure every dollar spent is helping to reach the right consumers at the right place and at the right time. If there are strategies that don’t accomplish this goal, then it’s time to get rid of them.
Marketers should also keep in mind that the demise of third-party cookies is impending, especially with Google phasing out third-party cookies in the Chrome browser in 2023. In a cookieless world, it’s important to eliminate ad strategies that don’t leverage behavioral data to target engaged consumers.
Focus on Contextual Advertising
After cutting outspending in areas that aren’t working, marketers can focus their valuable advertising dollars on context-driven ad solutions. These are ads that give brands the opportunity to reach their target audiences where they are most likely to purchase. This elevates their targeting efforts and gets closer to the ideal consumer when they are ready to buy or shop. For example, if a butter brand runs an ad on websites with baking recipes, it shows up in places where audiences spend their time. As well, contextual advertising allows brands to tie advertising messages to consumers’ preferences from first-party data instead of third-party identifiers. This is proving to be a vital path forward for marketers.
One highly contextual advertising method is tapping into shopping list marketing. Consumers are using digital shopping lists to plan their grocery shopping trips, with 49% of Americans using a list-building app on their mobile phones to plan or shop for groceries. To get on consumers’ digital shopping lists, marketers can tap into shopping list marketing to find shoppers building their lists, advertise products to them and motivate them to add these products to their grocery lists.
By getting on digital shopping lists, brands can influence both digital and at-shelf purchase decisions in an uncertain environment. Customers refer to their digital lists when shopping in stores. And add-to-cart activations encourage customers to place promoted products directly into their online baskets, maximizing budget and sales.
Another way brands can reach their target audiences is by retargeting ads. If a consumer has searched for an item on the brand’s site or abandoned a cart, marketers can use this data to reach back out to those consumers. Use the websites or apps they frequently visit and remind them to come back and complete their purchase.
Brand Marketers Must Make the Most of Their Budgets
Strategic ad spending is always critical to brands, regardless of the economic outlook or consumer behavior. But especially in murky economic times, it’s important that marketers are well-positioned to invest their money in areas that will generate the most significant results.
Instead of cutting out their ad spending entirely in an uncertain environment, marketers can use this opportunity to focus their efforts on the most impactful spending. As well, brands can capture the audience’s attention more easily when other competitors may decide to go dark. A secure, targeted strategy means marketers can move forward with a focused vision that flourishes in a tough economy.