Key Takeaways
- Prioritizing performance and measurable results can help marketers prove efficiency and impact.
- Social and traditional media will likely see the most substantial cuts, as channels with measurable attribution take their place.
- As competitors retreat to familiar channels, marketers can gain a competitive advantage by branching out into new channels.
Tariffs and economic uncertainty are driving consumers to change their spending habits. According to Forbes, over 70% of consumers are switching to less expensive brands or retailers, buying in bulk, and altering their budgets to account for higher prices. In response, the ad landscape is adapting rapidly. Today, 60% of advertisers expect to cut ad budgets by 6-10%.
While shifting economic realities are certain to affect your marketing plan, making the right moves now and in the coming months can give your brand a major competitive advantage. Knowing exactly where to cut spend and where to invest will not only yield positive financial outcomes; it can also give your brand a foothold in new markets, allowing you to take advantage of openings left by competitors who simply cut budget without a solid strategy.
Here are the key areas where strategic investment provides outsized benefits, making ad spend more efficient and yielding measurable business results.
Measurable Performance
As consumer spending decreases, marketing leadership is expected to keep a much closer eye on the bottom line. Even channels that seem to drive positive results may be at risk of being cut simply because the results aren’t measurable. Growth is inherently more difficult during economic turbulence, but by introducing efficiencies into your ad strategy, you can achieve growth while reducing ad budget waste.
If you’re looking for places to invest your ad budget with an eye on efficiency, focus on channels that offer the attribution needed to prove success metrics that company leadership cares about, like:
- Check Growth
- Incremental Sales
- Cart Size
- Foot Traffic and In-Store Sales
- Market Share
Digital channels like CTV or Digital Audio can be excellent alternatives to their traditional counterparts, simply because of the visibility into results they provide. For example, CTV and Digital Audio ads on GroundTruth provide clear insight into in-real-life actions like store visits or incremental sales with 1-to-1, deterministic attribution, so you can prove your ads are helping the bottom line.
Explore New Channels
While many advertisers are planning for budget cuts across the board, some channels will likely be substantially more impacted than others. According to a recent poll by eMarketer, 41% of advertisers expect to reduce their social media ad spending, 24% plan to cut linear TV spend, and 43% plan to cut other traditional media.
Why are these channels at the forefront of spending cuts?
Simply put, advertisers are increasingly investing in channels offering measurable ROI, and this trend is accelerating as markets become more uncertain. By comparison, only 12% of advertisers plan to reduce their CTV budgets, and just 14% plan to cut digital audio budgets, as both channels excel at providing measurable ROI.
When advertising in times of uncertainty, it’s not enough to focus on channels that have worked in the past. Advertisers need to be ready to invest in growing digital channels to gain:
- The transparency required to fully understand performance and prove success.
- Campaign oversight to fine-tune in real-time, increasing efficiency as the campaign runs.
Gaining a Competitive Advantage
As budgets are cut, most brands retreat to the channels that have yielded the best results for them in the past. There are two key reasons why this isn’t the best approach:
- It doesn’t account for shifting audience preferences.
- Overinvesting in one channel often leads to diminishing returns.
An example of shifting audience preferences: CTV viewership has been increasing at a monumental pace YoY. If a brand cuts its budget and focuses on linear TV only, they will miss out on the wave of increased viewership and the wealth of precise targeting that comes with CTV.
Any channel can be subject to overinvestment. Focusing spend in the most productive channel might seem like a good way to manage a shrinking budget, but this practice can actually reduce overall ROAS. This is because campaigns relying on single channels tend to lack the quantity of touchpoints (frequency) needed to drive customers. Rather than reaching your audience multiple times across multiple devices, your ads may only be seen in the context of one device, effectively turning the ad into background noise.
The best approach is straightforward: focus your strategy around the channels that prove measurable results, and invest in the omnichannel approach. Gary’s QuickSteak, a popular CPG brand, added a single channel to their strategy and increased sales lift by 50%. When your competitors limit their brand’s presence to only their best channels, you can fill the gap, driving significant brand awareness AND the real business results that matter.
GroundTruth offers a suite of targeting products across key media channels like Mobile, Desktop, CTV, over-the-top (OTT), Digital out-of-Home (DOOH), Digital Audio, and Direct Mail, all with built-in attribution. Sign up for our self-serve Ads Manager platform today, with no minimum spend or IO required.
