Managing paid media in uncertain markets
The last two and half years have been anything but straightforward for most people. Covid caused a reset in what we consider normal human behaviour, something we’re unlikely to experience again to such a degree in our lifetime. And despite the worst of that period being (hopefully) behind us, we’re now facing the deepest cost of living crisis for decades.
For marketing teams, the pressure to justify every pound spent understandably weighs heavy, and can in turn lead to some rushed decision making. So how do you strike a balance between short and medium term prosperity, and how do you connect with an audience who are changing their buying patterns so frequently?
Don’t cut all brand awareness
One of the first changes that businesses make when put under pressure is to remove all brand awareness activity. This leaves all budget focused on direct response campaigns, that you can definitively say made you X amount of revenue.
Sounds logical in principle, but the problem is that people make purchase decisions in complex ways, and unless you’re working in a very small average order value sector, you’re going to find your low-hanging fruit quickly disappears. This is because you’re relying on a finite pool of customers that will eventually dry up if it’s not being fed from above in some way, and you’re then going to have to spend an awful lot more to re-engage prospective audiences early on in their journey
Move away from demographic segmentation
Understanding what motivates your customers is the key to connecting with them on an emotional level. During difficult times, demographic segmentation becomes less reliable, because there’s far more at play than whether someone is male/female or under/over 30.
Instead, start to also segment your audience by psychological factors. An article in Harvard Business Review during the 2007-2009 recession highlighted how consumers can be categorised into 4 groups during an economic slump, and this is still as relevant now as it was then:
Slam on the brakes
This group feels the squeeze the most, and works to remove or delay all non essential purchases.
Pained but patient
The biggest group, covering the widest range of income levels. These consumers also economise wherever possible but less aggressively. They are unsure of their ability to maintain the same standard of living as before, but also recognise that longer term things will improve.
Comfortably well off
The top 5% of earners. Consumers in this group continue to spend at a similar level to before but are more selective.
Live for today
Those who continue as normal and are less concerned about savings. Tend to be a younger group, renters rather than homeowners, and spend more on experiences.
These groups also view products/services as sitting within one of four categories:
When you combine a group with a type of product, you get an idea of how likely they are to change their behaviour based on the market. This is a powerful way to start thinking about who you should be targeting and what content they will want to see:
The key here is that a large number of sales will still fall into either the green or yellow categories during a downturn, meaning there is a market to be capitalised on, it’s just about appealing directly to those groups. This is where your messaging is vital. For example, sales for a theatre show that were historically strong for families, could pivot to focus on young friendship groups instead, with relevant imagery and copy such as evening show timings rather than matinees or deals with dinner included. The wording could be about capitalising on experiences happening right now, and creating memories.
You don’t need to always change focus from one consumer group to another either. Honing in on what makes your product essential can also work to swing indecisive buyers. For example, during more prosperous times, a headphone company would perhaps use aspirational messages about better quality sound and comfortable fit. Now they may choose to change this to what purpose the headphone ultimately fulfils, such as to allow you to work more efficiently at home.
Set expectations internally
With recent historical trends potentially meaning very little, and a need to be extremely agile in everything you do (including the products/services you offer), everyone within the business needs to be on the same page and ready to move fast. There are always opportunities to be found if you can be quick enough to respond, and often excellent ideas/initiatives fail simply because they took too long to get off the ground.
It’s also important to set expectations for your advertising itself. If for example you’ve made cutbacks to lots of other marketing channels, it’s likely to have an impact all round, including on your paid campaigns. Asking questions like “what does good look like in the short term?” can really help to ensure that everyone is aligned and understands the potential challenges.
Utilise the power of digital marketing
Advertising in an uncertain market can be challenging. But digital marketing is powerful and when done well, can provide the tools that react quickly to trends, build on successes or focus on the clear areas of identifiable growth. Our advice is to start by reviewing your plans and expectations from the ground up, both in terms of what good looks like, but also who you’re targeting and why. The pandemic has shown that digital marketing can make a big difference, and connect you with the right people at exactly the right time.