In economic uncertainty, don’t cut back on ad spend, cut on ad waste

In economic uncertainty, don’t cut back on ad spend, cut on ad waste

As both consumers and businesses face economic headwinds from recession, rising inflation, volatile stock markets and ongoing issues from the pandemic, ad spend is likely to be reduced as brands appear to become more efficient.

But this may not be the time to cut corners, as it comes at the expense of sales and brand metrics. However, now is an ideal time to reduce waste and improve performance with a new approach that drives sales and creates long-term sustainable value.

The pressure to increase efficiency in a shrinking economy usually comes from cutting marketing spend. This is an environment to reduce waste, not spend. Maintaining ad spend and eliminating waste is a winning strategy for marketers, as they can actually increase sales and make exorbitant profits over competitors who roll back their spend.

The Challenges to Overcome

The advertising industry is driven by legacy systems, fragmented point solutions, and heavy service models. This creates an extremely inefficient and unhealthy ecosystem in which most of the spend is wasted on the wrong target audience and on over- or under-exposure of advertisements. This puts the entire industry at risk.

Ads are valued, traded (currency) and optimized based on non-sophisticated and inaccurate metrics such as people exposed within an age and gender cohort versus in-market sales prospects who have a higher probability of converting.

Traditionally, ad measurement has been unable to deduplicate and compare across traditional, digital and streaming platforms, causing waste as consumers see the same ad too often or too little. This makes for a wasteful distribution of delivery where some audiences are overexposed with ads while other valuable prospects don’t get enough exposure to motivate a sale.

Outdated TV currency and metering solutions built on a single panel – separate from big data – are unable to effectively measure streaming audiences, destroying value for TV networks by underrepresenting their growth assets. For advertisers, it means not only admitting that there is a lot of waste within the current system, but also figuring out a way to do something about it.

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