Why Smart Brands Boost Ad Budgets in an Economic Downturn
A customer-centric focus can guide you through uncertainty
By Jascha Kaykas-Wolff, President, Lytics
As the world around us changes and evolves, so do our customers. Because modern technology has made it possible, nearly anything a customer could want, at any given time, is available on-demand, in real time and often at their fingertips.
It only makes sense that brands follow suit, remain agile, and adjust ways of working and doing business accordingly. This may mean overhauling outdated processes, investing in their web or mobile user experience or finding new ways to leverage the tools already at their disposal, like their customer data.
It’s perhaps for this reason, among others, that despite major concern about the impact of inflation and economic uncertainty, advertising budgets (particularly when it comes to paid search) are still on their way up.
Combat uncertainty with stellar experience
To be exact, as many as 85% of advertisers are highly concerned about the effect inflation will have on their business performance. For enterprises (with a revenue of $500 million-plus), that number jumps as high as 91%.
In June 2022 alone, inflation rose 9.1% (though it does show signs of flattening), leaving many brands asking the same question: How can we scale our success and boost ROI, while accounting for the fact that both our business and consumers face months of uncertainty ahead?
The answer lies in operating with a mindset focused on delivering the best experience for your customers, that can also deliver on your bottom line. Customer-centricity isn’t just about mastering the basics of personalization against traditional segmentation (which is built around third-party demographic data). It’s about thinking beyond that.
Marketing has seen a multi-year shift toward data-driven decisioning: making smarter use of data (and most often, customer data) and technology to evolve business processes and grow business performance beyond what was previously thought possible. Nonetheless, despite brands’ attempts to become first-party data-driven, persistent challenges remain.
View hurdles as opportunities
Primarily, brands struggle in two areas: accessing the data needed to find the right audiences and to build the most effective marketing campaigns that will engage prospects and current customers. Why? Most organizations struggle with maintaining a useful, unified customer view over time. But with the impact of an economic downturn layered on top of these challenges, brands have even more to contend with—and not much time to act.
In fact, 71% of marketers struggle to maintain an accurate, useful consumer ID throughout changes over time, and nearly half of marketers feel that the information they are trying to access (when building the best audiences and powering effective marketing campaigns) is hard to find .
Unprecedented circumstances often force change, and force that change to happen quickly. Now is the time to address your blockers to enable capabilities to power true customer-centricity.
Today, brands face a trifecta of hurdles: the rise of inflation, continuing supply chain issues and the end of third-party cookies—all overlapping. As many as 86% of brands even feel that the way they interact with customers has permanently changed due to the pandemic.
They’re viewing this, however, as an opportunity rather than a threat: one to boost spend on the right drivers and focus their energy on the investments that will yield a worthwhile return.
Build a strategy around first-party data
So, how can brands reclaim their stake in winning, highly and accurately personalized customer experiences for true customer centricity? By using identity resolution to build unified and useful customer profiles based on consented first-party data.