Couldn’t this simply be a case of advertisers shifting their spend from TV to digital media? The gloomy outlook for digital ads held by those who know the market best doesn’t suggest so. Spotify, Snap and Meta all warned of slowing demand for digital advertising in their most recent trading updates. Meta, whose growth is particularly tied to sustained growth in digital advertising spend across its platform, dramatically cut 11,000 of its staff last month.
The warning signs are flashing but it would be a mistake to conclude that companies are going cold on the value of advertising full stop. Budgets are being cut in line with a deteriorating global economy, certainly, but marketers still have money to spend in 2023, albeit in a more targeted way.
Lingering questions
Unfortunately for marketers, today’s uncertain digital media outlook makes it difficult to know how to best prioritise slashed budgets. The chaotic circumstances around Elon Musk’s takeover of Twitter prompted global media agency Omnicom to advise its 5,000 clients to pause their Twitter promotions over brand safety fear. Whether or not Musk successfully alleviates these fears in future, some brands may choose to keep their ads off the platform for good. With over one billion daily users and rising, advertisers may increase their utilisation of TikTok instead – particularly those brands with a younger target audience.
It’s not just a question of where, it’s also a question of how. The tracking methods behind successful targeting of digital ad campaigns are in jeopardy as online platforms continue to respond to increased consumer expectations of privacy. Apple’s recent privacy changes hamper cross-app tracking and Google is shifting towards a future without third-party cookies.
Future success doesn’t require a total overhaul
These are trying questions to address but advertisers shouldn’t feel helpless. Despite uncertainties, the fundamentals of effective advertising remain true. TikTok might be a great home for some ad campaigns, but influencing consumers still ultimately depends on an engaging creative, thought-through demographic targeting and tailored presentation.
The savviest retailers will take heed of the latest consumer habits and adapt accordingly. New market research findings from Google show more UK consumers than ever are trying out new brands and browsing online to seek inspiration before a purchase. This, Google notes, aligns with an increase in Google searches to compare options – think ‘best coat’, ‘best deals, ‘best hair product’.
Tightening rules on ad tracking across platforms doesn’t necessarily spell the end of the targeted online ads that have served retailers so well. Many are pointing to the power in first-party data that retailers can harness. Customer contact details, point of sale data and user information is vital data that will help retailers continue accurately targeting and measuring the impact of their ad campaigns. Some retailers won’t realise just how much first party data they’re sitting on until they break down silos between internal teams to understand how and where data is being collected. That includes in-store and online teams!
Heading into uncertain times with slashed budgets across the board is a daunting prospect for the advertising industry. Closely aligning with today’s consumer habits and incorporating first party data into ad targeting strategies, before hands are forced, forms the foundation of a strategy to continue driving impactful results in 2023 despite current headwinds. Moving with the times, to put it succulently, appears to be the play!
