How brands are responding to the increasing cost of marketing

For most marketing professionals, these are uncharted waters. However, brands are adapting to a world where it costs more to do business by evaluating their existing marketing efforts, refining their offers and leaning on reliable partners. 

How brands are recalibrating their marketing mix

A natural reaction to increased cost is to scale back expenses, and to many organizations, marketing budgets are the first place to cut. However, no business can afford to stop connecting with consumers if revenue and positive business outcomes are the goals. 

As the rising costs put people under stress, advertisers can be part of the solution, offering guidance, deals and opportunities to deliver on basic needs and self-care. Brands that prioritize engaging with consumers stay top of mind and are rewarded with long-term loyalty. This near-term investment will pay long-term dividends when economic circumstances improve.

When every dollar counts more than ever, an objective assessment of the return on ad spend for every campaign and tactic is critical. Setting and forgetting seldom works, and tight budgets won’t permit chasing every shiny new marketing idea. Instead, an informed, measured approach empowers brands to identify how audiences are changing, along with new media consumption patterns, and how those audiences are holding onto older, comfortable habits. 

Right now, shoppers are actively seeking ways to save and using everything available to achieve that goal. For example, while some consumers may cut back on costs by switching to a cheaper streaming platform, that does not mean they are eliminating streaming entirely. Successful marketers know to avoid assumptions about people’s consumption — rarely a simple on-or-off scenario — while those that rely on a narrow set of channels and tactics may miss these people who may well be in the market to buy.

Brands that are testing and learning are the ones that will identify what works best to drive sales in this environment and make a profit. They are evaluating new channels such as social media platforms and connected TV while homing in on the most effective media mix with tried-and-true tactics like shared direct-mail packages and display advertising. 

This does not mean teams simply choose between old-school marketing tactics and digital marketing. As Christine Moorman recently said in Harvard Business Review, “When used together, traditional and digital marketing can reach more audiences, build and keep trust and motivate buying from consumers who otherwise might tune out marketing messages.” 

Why advertisers are embracing empathy, creativity and flexibility

Historically, consumers are more likely to seek out value during difficult economic times. That’s proving true in our current environment as people prioritize relevant offers. 

They want coupons and deals to help them stretch their spending as far as possible. Otherwise, they may have no choice but to stay home and not spend at all. For example, when it comes to restaurants, people are less focused on which dining experience to choose and more focused on whether to eat out in the first place. And even if they choose a night out, they buy less and pick cheaper menu items. In these circumstances, a well-timed offer may be exactly what it takes to prompt a consumer to buy.  

Harsh economic realities also mean people value brands that deliver sincere, empathetic and relatable messages. Just as marketers are trying to make the most out of the present circumstances, consumers want guidance on how to survive and thrive in these times.

As important as it is to maintain share of voice and stay top of mind, the current economic realities are demanding advertiser adjustments. Few brand marketers need to be reminded of supply chain issues or the increased cost of advertising. To face and overcome these difficulties requires creativity, flexibility and ingenuity. That may mean redirecting budget toward media that is readily available or cost-efficient. It may also require new or more reliable execution partners. 

These challenging times are an opportunity for brands to evolve how they market their message, accounting for the logistical and financial headwinds. For instance, some direct-to-consumer e-commerce brands enjoy significant ROI from printing and mailing a monthly catalog that sparks discovery. But paper shortages and postage increases have made this historically reliable play untenable. As a result, some brands are shifting their previously premium catalog production to a teaser direct mail piece that directs to a robust online experience. 

Benefitting from reliable partnerships

Even in the best of times, investing in mutually beneficial partnerships is a proven strategy — and it becomes mission-critical in difficult times. Generally, the best partners are those with whom brands can openly share challenges and work together toward the most effective solutions. To address the rising cost of marketing, brands are investing in partnerships that offer data and insights, production flexibility and consistent returns.

Better data increases the efficiency of finding and targeting the ideal audience and provides the tools needed to adjust offers that attract and engage consumers. Brands with omnichannel strategies also require partners that accommodate various formats and timelines, ideally spanning the entire marketing mix from traditional print to digital media.

With economic difficulties all around, a partner with a record of delivering a return on spending over the long term — especially in recessionary and inflationary times — makes a powerful difference in brands’ budgets and efforts.

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