Are we in an advertising recession? SMI data says no but are we splitting hairs? Ben Willee asks the question and mulls the implications.
The latest SMI numbers are out and after adjustments, it looks like we have narrowly avoided an advertising recession.
The definition of a recession is two consecutive quarters of negative growth in GDP and when it comes to advertising, we’d know we were in a recession if we saw two consecutive quarters of negative growth in SMI ad spend.
With the data showing calendar year to date down 1.9%, are we splitting hairs? I reckon we’re so bloody close, it’s largely irrelevant.
Plus there’s plenty of anecdotal evidence to support this from TV networks like 10 killing shows including the former hit The Masked Singer to News Corp undertaking yet another mass-scale restructure.
Mark Twain is believed to have said, “History doesn’t repeat itself, but it often rhymes.”
And when it comes to the prospect of an advertising recession, there is plenty to learn from the past – specifically the dot-com downturn of the early noughties and the Global Financial Crisis of 2007/2008.
The first lesson we learned is that it’s a bit like wrestling a porcupine in a balloon factory – tricky, prickly, and potentially catastrophic if not handled with care. The key when wrestling is flexibility and training. The biggest danger is doing nothing.
Here’s how to stay nimble.
Revisit your key performance metrics: Ditch the vanity metrics. Focus on what truly drives your business forward. It’s not about how many likes you get but how many conversions you achieve.
Get flexible: Often when the market is soft, advertisers hold back. However, good results are not just about holding back. Consider making medium-term commitments to key channels. Media owners love to be in committed relationships with their clients and will offer plenty of benefits in return. These benefits include access to no-charge activity, upgrades, integrations, and most importantly, reduced cost per thousand.
Negotiate with hard data: If you’re testing new mediums and approaches, there’s no better time to invest in attribution modelling. Now’s the time to be apply data-driven marketing. There are many methods to mathematically prove the causation between advertising, sales, and awareness. The cost of doing this is getting cheaper, and it’s much easier to secure additional budget if you can qualify the likely impact of your media spend. Better still, it’s a great way to protect yourself from the CFO who is looking for bottom-line savings.
Supply chain transparency: I don’t want to talk out of school, but we’re seeing huge amounts of wastage in this area. Ensure every dollar spent is accounted for and delivering value. Transparency in your supply chain is more crucial than ever.
Do some crystal ball gazing: We know that Netflix, Amazon, and Disney will all be putting quality video inventory into the market in the back half of the year. All that extra supply is going to impact the price of video. Anticipate these changes and adjust your strategies accordingly.
Plan for the upturn: This isn’t the time to panic; it’s the time to plan. Remember, all things that go down need to go up. And, as history has shown, periods of downturn are often followed by periods of growth. Flexibility in negotiation strategy is key. Start thinking now about how you will respond when things turn around. The decisions you make now can impact the long term.
And remember, don’t let the urgent get in the way of the important.
Keep your eye on the long game, stay flexible, and make sure you’re ready to take advantage of the upturn when it comes.
