Advertisers are shifting their holiday campaign strategies this Black Friday and Cyber Week, moving down the funnel in response to economic headwinds.
Prices are up, consumer spending is down and supply-chain issues persist against a backdrop of runaway inflation – a top concern for shoppers as they stock up on holiday gifts. Not to mention there’s a looming recession predicted for 2023.
Consumers are feeling the pinch of cost-of-living increases for everything from housing to Thanksgiving dinner. On average across the US, turkeys cost 50% more this year than they did in 2021. Budget-conscious buyers are beginning to value bargains over brand loyalty.
It’s therefore no surprise that marketers are zeroing in on measurable media and prioritizing lower-funnel customer conversions. In tough, uncertain times, building brand awareness often falls to the wayside.
More than one-third (35%) of advertisers surveyed by Advertiser Perceptions in October cut down on their 2022 ad spend because of economic forces such as inflation. Of that group, the majority (54%) pulled back spending from targeted linear TV, with 31% opting to pare down their traditional out-of-home (OOH) investment and 26% pulling back on their social media spend.
Still, most of the buyers Advertiser Perceptions spoke with said they hoped to restart their spending on linear TV and OOH platforms for the holidays – a nod to the vital nature of the festive season for marketers. All hail Q4.
But we decided to ask the experts ourselves: How are inflationary and recessionary worries impacting media plans around Black Friday and Cyber Week?
- Shaun BrownEVP, commerce, Tinuiti
- Kassi Sochadirector analyst, retail, Gartner
- Amy Burrowssenior account director, client services, Goodway Group
Shaun Brown, EVP, Business, Tinuiti
Going into this year’s Black Friday and Cyber Monday/Week, we’ve seen a bit of a shift among our clients to the mid and lower funnel to focus on connecting with shoppers at the moments closest to purchase to drive conversion.
According to a Shopify global research survey conducted online by Sapio Research, three-fourths of shoppers are seeking higher-quality products, and nearly half will go elsewhere to get it, so driving that message is critical. But more than 80% of shoppers are price comparing, with nearly two-thirds of shoppers willing to switch brands. To get ahead of that curve, many brands have ramped up their CRM efforts, and the survey shows that nearly 70% of shoppers want to hear from brands and will likely convert.
Kassi Socha, director analyst, retail, Gartner
Consumer concerns and behavior continue to shift as people feel the impact of inflation and worry about a coming recession. Gartner found that 48% of consumers planned to begin shopping in October or November to not only ensure they find the gift in stock – a carryover concern from last year – but also to find the best price should retailers continue to raise prices.
Retailer marketers responded by launching holiday campaigns earlier to move through excess inventory and extend the holiday shopping season.
Retailers are increasing the frequency of holiday deal messaging across digital, specifically in email and paid social. Consumers are also increasing their online shopping and visiting more retailers to compare prices.
We’re seeing strategic retailers investing in affiliate marketing, specifically coupon and price comparison sites, in order to efficiently capture new customers prioritizing price over staying loyal to their favorite retailer.
Amy Burrows, senior account director, client services, Goodway Group
With one of our major national retailers within consumer goods, we’ve seen a strategy shift that started about a month ago. All upper-funnel investment was pulled out of the market because it wasn’t immediately feeding the bottom line.
They’ve since shifted their brand dollars to mid- and lower-funnel campaigns. For them, the foresight of the advanced media mix adjustments made as an enabler to be much more competitive during the holiday season. Although it’s an example of short-term gains at the potential sacrifice of long-term brand building, once they net out at a positive for the year, we should see the marketing investments come back into play.
Answers have been lightly edited and condensed.