Advertising - for better or worse - is an inescapable part of modern life, but it’s sobering to learn quite how much our exposure to it has grown in just a few decades.
In the 70s, it was estimated that the average person laid eyes on around 500 ads every day, mostly confined to TV screens, print newspapers/magazines, radio broadcasts and billboards.
Fast forward to today and that number has ballooned to between 6,000 and 10,000 per day. This is in no small thanks to the internet.
Any media publisher that has been selling ad space for more than a few years has witnessed this rapid evolution and expansion of the advertizing landscape, and knows that it is showing no sign of slowing down.
What’s more, the very businesses they are selling their advertizing real estate to are persistently at the cutting edge of this change, adjusting their requirements in lockstep with the technology, and expecting more from the vendors they work with.
This is understandable: with such a cacophony of advertizing going on, marketers know that it takes more than simply buying an online banner here and a print ad there for their business to stand out. They approach their profession very strategically, always scanning the horizon for new platforms and technologies, and are prepared to pivot to any major changes.
Some of the latest changes are outlined in Gartner’s recent “The State of Marketing Budgets 2021” report, which revealed that marketing budgets fell from 11% in 2020 to 6.4% in 2021 as a function of overall company revenue; a record low since this data has been gathered.
If you instinctively attribute that drop to pressures brought on by the pandemic, you would be largely right. But the expectation was for normal service to be resumed in 2021. That change never came, which Gartner attributes to marketing departments proving that they could do more with less, as well as ongoing rapid digitalization.
The main areas that suffered in the cuts were offline advertizing and events, unsurprisingly. So what were marketing departments doing to ensure their reduced pocket money went further? The study found that the lion’s share (72.2%) of remaining budget was funneled into digital channels.
Speaking of funnels, the forecast outcomes of the budgets cuts are best understood in terms of their impact on the “marketing funnel” - following the AIDA model:
- Capturing Awareness of your customer
- Engaging their Interest
- Making them Desire your product or service
- Finally drive them to take Action (in the form of spending money)
According to Gartner, the impact of marketing budget cuts on the top of the funnel (Awareness and Interest) won’t be immediately appreciated, but 40% of surveyed CMOs said that improving brand awareness was a top priority in the wake of the cuts. A further 47% said that they wanted to keep up with the pace of change brought on advances in digital technology.
In light of these findings, ad vendors like you need to demonstrate strong digital capabilities, and be ready to quickly tailor marketing packages to focus on the top of the funnel.
Here are three specific areas of focus to help you do this:
Provide the right channels in the right combination
You’re expecting an influx of customers who heavily favor digital channels, and want to focus on top-of-funnel activation. For this you need to be ready to offer packages that include one or more among online display, TV/video, branded content and OTT (over-the-top) advertizing - the most robust digital drivers of awareness.
While these products may already be part of your standard product set, be prepared to offer packages that balance activation of the top, middle and bottom of the funnel in novel proportions (this is related to the 60/40 Rule and Multiplier Effect we wrote about recently).
Prepare for a cookieless future
More than anything else, advertizers value the ability to target their audience effectively. But with a cookieless future on the horizon, publishers are about to lose their most effortless mechanism for doing that. With third-party data gone, you are going to have to take proper advantage of first-party data and zero-party data.
Contemporary audiences are more privacy-conscious than ever so you have to earn their trust before you can get this data. Ensure that your compliance messaging is prominent and transparently states how volunteered data will, and will not be used. Be extremely clear that you will not sell any data to third party advertizers.
Offer value in exchange for data, and outline the tangible benefits to individuals that do volunteer their data, e.g. adding them to prize draws, extending event invitations and giving them early-bird access to new products.
Periodically use on-site questionnaires, quizzes and contests to glean more voluntarily-acquired information from your audience.
Understand - and sell - your audience
Although you may think that the primary product you are selling is advertizing space, the real commodity is the eyeballs of the people seeing those ads. So you need to know as much as you reasonably can about them, and use their profile as a selling point.
There are two types of data you can get to build your audience profile: demographic data and behavioral data.
Regular audience surveys will help you build up a database of audience demographic data: average age, sex, family-type, education, income, recreational habits (e.g. dining out, traveling abroad).
Proper ongoing investigation into your own analytics will help you build up a picture of audience behavioral data, e.g. what content types get the biggest audience, what times of day, or days of the week drive peak audience traffic?
Despite all the post-pandemic talk about a “new normal”, the evolution of the advertising landscape means businesses like yours are always going to be operating in a kind of new normal. As marketing departments adapt to rapid digitization, smaller budgets and increasing privacy concerns among the public, your best response is to ensure that you can adapt your products to their new priorities, understand your audience, and be in a position to target them effectively.