Even in the midst of economic uncertainty, advertisers are bullish on experimental ad spend. While ad spend across the board is reducing, agencies are advising clients maintain their budgets to test and learn in channels that are newer, like TikTok, or new to them, like digital video and streaming audio.<\/p>\n
With ad spend under more scrutiny than ever, brands should continue looking for cost-efficient and relatively new ways to boost brand awareness, especially as go-to performance marketing channels have proven less effective thanks to data privacy measures.<\/a> Over the last 18 months of data privacy rollouts from Google\u2019s crumbling cookie to Apple\u2019s iOS 14 update, targeting and measurement have become muddied. The changes have sent advertisers scrambling to find new ways to reach consumers.<\/p>\n They are doing so by testing more brand awareness channels, including ad-supported streaming services like Hulu, YouTube and now, Netflix, TikTok and other media channels. The purpose for maintaining that test and learn budget is to ensure advertisers\u2019 eggs aren\u2019t all in one basket, diversifying media spend.<\/p>\n At Fitzco advertising agency, an estimated 10-15% of client ad spend is typically dedicated to testing and learning. Overall, budgets have been either flat or down 5% across the board. Still, Claire Russell, head of media at Fitzco, says it\u2019s almost mandatory that clients maintain that 10-15% experimental budget to continue testing and and learning throughout economic uncertainty. <\/p>\n \u201cWe\u2019re working to try and retain the experimental bucket as much as we can by aligning it to an overarching learning agenda,\u201d Russell added via email. \u201cEven within flat to down budgets, we\u2019ve still seen clients have an optimistic outlook and openness to experimenting.\u201d<\/p>\n In the past, Fitzco clients have leveraged streaming video ads before, but minimally. Recently, they are investing more in platforms such as YouTube, Disney+ and Hulu. (She did not provide exact spend figures). \u201cThey want to look at, how do we get different creative in video, how do we spend more [ad dollars] there, how do we start looking at things like brand lift,\u201d she said.<\/p>\n Meanwhile, independent media agency, Ocean Media, is seeing client growth in podcast advertising as well as streaming audio as more consumers use these services, according to Clintton Fleschere, chief client officer of Ocean Media. The majority of the investments are in Pandora, Spotify and iHeart radio network. \u201cWhat was found was [that], where consumption goes, that\u2019s where you\u2019re going to be able to test out, learn and gain the best learnings,\u201d he said. (It\u2019s unclear what that testing looks like as Fleschere did not provide exact figures.)<\/p>\n Ad spend has slowed across the industry overall<\/a> as budgets come under more scrutiny with economic uncertainty. This year, eMarketer predicted U.S. ad spend<\/a> will hit $279 billion, a decrease from its original prediction of $284 billion last March, thanks to inflation, online advertising\u2019s dwindling growth and, of course, data privacy changes. Social media is expected to suffer the brunt of those changes, while connected television will be a bright spot, per the report.<\/a><\/p>\n Many clients are looking for more efficiency, but aren\u2019t necessarily wanting to test less or decrease testing budgets. Instead, clients are looking for channels where measurement and attribution is easy to obtain, like audio, which has yet to see slowdown,<\/a> and video streaming, Fleschere added.<\/p>\n \u201cAll of our clients and brands are trying to find those new pockets of efficiency,\u201d said Fleschere. \u201cWhether the KPI is response or awareness, they\u2019re looking for those new opportunities.\u201d<\/p>\n However, experimentation with emerging platforms, like the metaverse, cryptocurrency and virtual reality, are either shelved for now or being narrowly tested during promotional campaigns, holiday marketing or other temporary events. This is mostly due to many unknowns in Web3 and thus, a steep learning curve. (More on metaverse skepticism here.<\/a>)<\/p>\n \u201cFor our brands, they\u2019re going to want to be able to make sure that their dollars are hitting on those that they feel are the most measurable and the best opportunity,\u201d Fleschere said.\u00a0<\/p>\n Not everything is going to be right out on a real time basis.<\/p>\n Claire Russell, head of media at Fitzco<\/p>\n<\/p><\/div>\n The challenge, however, will be convincing clients to not make comparisons between the success seen during the height of the pandemic, online shopping, and thus, digital advertising, and the success of experimental channels today.<\/p>\n \u201cIt\u2019s difficult to beat those comps and in turn justify why you\u2019re experimenting at all because it always looks like it doesn\u2019t work,\u201d said Russell. \u201cWe\u2019re all attached to real-time, mostly last click performance and it\u2019s difficult to justify some of that brand spend in the downstream impact it can have.\u201d<\/p>\n That\u2019s not to say clients aren\u2019t on board with moving back to experimental brand awareness channels, like audio and streaming. But that is to say it\u2019ll take more coaching and hand holding from agency partners. \u201cNot everything is going to be right out on a real time basis. And not everything is going to be so one to one,\u201d Russell added.<\/p>\n Ultimately, experts say, it\u2019s within a brand\u2019s best interest to continue testing and learning, especially through economic uncertainty, where\u2019s a chance to test and learn early enough to stand out in an increasingly crowded media landscape.\u00a0<\/p>\n In an emailed statement to Digiday, Andrew Kasprzycki, Dentsu Creative president of experiences, said, \u201cWhile traditionally-defined \u2018ad budgets\u2019 will no doubt be cut, the best and brightest will shift some of those cuts to drive innovation and experimentation.\u201d\u00a0<\/p>\n<\/div>\nEfficiency over testing budgets<\/h2>\n