Although 2021 has brought progressive positive steps in normalizing the damage to consumers ’propensity to spend, it seems we are living in another period of grief. The U.S. faces persistent and widespread supply chain problems that affect advertising spending in some verticals.
If we take a step back, this is not only a problem for the respective brands, but there is also a bigger problem – the inability of consumers to receive the necessary and desired goods and services in a timely manner.
Because of this, brands and marketers are now or expected to cut advertising spending by 10-50%, reports Business Insider Report. This is a significant shift in the digital marketing ecosystem and needs to be carefully analyzed to find a way forward. In terms of logic, it makes sense – brands are trying hard to determine the value in promoting goods and services that cannot be sold in the near future. However, diverting advertising costs at this time will inevitably lead to long-term damage in terms of presence and proximity.
Here are some considerations that brands and marketers need to explore when we are experiencing an era of limited supply.
Sciences from the recent past
Let’s think about some of the key points that the digital marketing industry experienced a little over a year ago. During 2020, there were constant changes in consumer shopping and content consumption habits. Unpredictable volatility created difficult conditions for navigation, especially in terms of advertising. Because of this, we have seen that many brands stopped spending on advertising during the peak of the pandemic. An example of this is the wheel. Their advertising spending fell 35% during the pandemic, and then revenue fell $ 4.2 billion. according to TradingPlatforms.com.
To further demonstrate the weight of suspended advertising costs, a recent Ehrenberg-Bass study found that discontinued advertising spending leads to a significant long-term decline in sales. The study found that average sales fell 16% after a year and 25% after two years. Simply put, companies that have cut their advertising costs during this time have found it difficult to implement their marketing initiatives at the bottom of the funnel and have not changed their marketing approach. For reference, advertising at the bottom of the funnel usually means encouraging immediate sales, conversions, etc. Where advertising at the top of the funnel usually means investing in brand awareness and loyalty.
Tactics of success
To stay in the spotlight while offerings are low, brands and marketers can adjust their messages by putting the company’s mission at the forefront. This is the ultimate strategy – it is an opportunity to demonstrate the history of the brand and the useful contribution they make. For example, retailers may develop an advertising campaign that draws attention to the local community because they care and demonstrates their commitment to help. Another example can be seen in the automotive industry; car manufacturers need to focus on their future by promoting investment and research and development in electric vehicles. These types of interactions not only bring a sense of comfort, but also demonstrate how brands play an active role in improving society.
In addition, companies can emphasize how they increase convenience. For example, retailers can take a hyperlocal approach and develop unique messages that serve as an update point for consumers. Their interaction with the audience can be done through a variety of channels, offering personalized updates on when specific items are in store, or tips on how to secure the product upon arrival of the next delivery.
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Because brands doubly demonstrate their true value and the way they help their communities, this will keep them in the spotlight for consumers. Due to supply chain problems, organizations need to think about moving from a standard audience search at the end of the funnel to a more mission-based strategy. By tracking consumer preferences and changing habits, as well as adapting to new market perceptions, brands will be ready to provide goods and services as soon as supply problems are alleviated. This will increase brand awareness and loyalty in the future, which will ultimately increase market share. How have you adjusted your marketing due to supply chain problems? Let us know next Facebook, Twitterand LinkedIn.
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https://www.toolbox.com/marketing/programmatic-advertising/guest-article/marketing-funnel-change-alongside-supply-chain-issues/ How the marketing funnel needs to change along with supply chain challenges