Hold your nerve and invest smartly in 2023
By David Price, Managing Director, The Grove Media
There’s always a danger in times of economic uncertainty that we can talk our way into further decline. So an ever increasing focusing on the downturn across the media can turn into self-fulfilling prophecy.
The UK’s major TV channels may have been thinking this when they saw the results of ISBA’s recent survey of 59 advertisers, which found that linear TV will bear the deepest budget cuts, with 67% of those surveyed saying they planned to cut broadcast spend. In addition to this, 40% said they planned to reduce investment in other areas of traditional media. The report concluded that there is a general shift to digital, with a third of respondents looking to increase spend on paid search and social.
Despite the industry’s understandable anxieties about the prospects for 2023, I don’t see the findings of the research in any way surprising, and I also don’t think it fuels further decline. In fact, if anything, it’s evidence of smart planning. During tough times, brands can ‘play it safe’ with more easily measurable online media, particularly those in performance marketing. Social media can deliver scale for lower capital costs than other more ‘traditional’ media channels.
The most interesting finding is that more advertisers are planning to shift spend in digital TV – notably BVOD. The likes of ITVX and All4 are currently seeing increased demand. While there are issues with CTV that still need to be resolved, the increase in BVOD spend is very positive.
BVOD gives advertisers access to quality programming at affordable rates – spots in highly rated shows and formats that would be too expensive in linear TV. With BVOD you can engage an audience that can consume your advertising almost anywhere and at any time. And, crucially you can effectively target very specific audiences based on demographics, interests, geolocation etc and track and analyse advertising performance.
So an increase in spend on CTV, specifically BVOD, over the coming months is a good thing and all part of smart media planning. And for those advertisers who can still invest, there are likely to be some good deals to be had in linear TV and areas of traditional media as the sector feels the crunch.
It’s been said before, but the best approach for advertisers is smart investment not cutting investment. Those brands that can resist cutting adspend may take a short term hit in profitability during the downturn, but will show much stronger growth in recovery. It really doesn’t pay to ‘go dark’. It’s a blunt tool that carries a high risk of share loss, an expected five-year recovery period and significant loss of profit when markets return to ‘normal’.
Brands should also be wary of short-term promotional strategies which can lead to consumer dependency and, ultimately, loss of profit. While the current reality may seem harsh and scary, we have been here before, and so as an industry we need to learn from the mistakes of the past and build on the smart thinking that has evolved from previous situations of adversity. The ISBA research back this up, with marketers saying they are likely to increase investment in brand-building activities – an impressive 30% of companies surveyed said they are committed to investing for the longer term.
And remember, one of the key benefits of continuing to advertise in a downturn is the extra share of voice. Smart marketers use periods of economic pressure and uncertainty to build brands more cheaply as their competitors scale back on marketing to save money. ESOV is widely validated as a key driver of effectiveness. Brands that invest in SOV during a recession have been shown to benefit from startling results.
Picture courtesy of Mike Petrucci @ Unsplash
