Businesses that invest heavily into digital channels have been experiencing the same issues we all face when buying a loaf of bread or pack of pasta. Jim Hawker, co-founder at Threepipe Reply, considers the rising cost of media and what marketers can do to work around it.
The price of media has been creeping up to the point that we are telling clients that if they choose to maintain the same strategy as last year, then they will need to spend more to simply stand still.
The reasons for the price increases are manifold.
There has been an increase in the number of companies wanting to spend budget across digital channels, which means demand is higher and therefore pricing is higher. While the media spend has increased, the number of digital channels and the diversity of the ad inventory available to brands has not increased at the same pace, which means higher competition to run campaigns.
While the growth of investment in digital channels is slowing, it is still faster than the growth or decline in other offline channels, and brands are simply wanting to put their budgets where media is consumed.
This rise in media prices is expected to continue for this year and beyond, and do not forget we also have a World Cup happening later this year – which also tends to push up media prices even higher.
So, what can brands do?
We are advising clients to take more of a holistic and integrated approach to their digital strategies, and to experiment more and more agile in their media planning.
At the same time, there will undoubtedly be inefficiencies in what they are currently doing, and it is worth reviewing all existing activity. There are some key areas that brands can look at right now to tighten things up and drive more efficiency in media spend.
Having brilliant creative will certainly help deliver better performance metrics, rather than the continued expensive pushing of poor creative. Having assets that are optimized correctly for the right channel and a good variety of assets will help reduce the creative fatigue and underperformance.
Having a well-optimized website will ensure improved conversion of the traffic that is being driven to the site. Why waste all the paid media budget if the site experience is poor? Those brands that are investing in a great user experience (UX) on their apps or websites will see less prospects drop off the user journey from discovery to purchase.
Committed investing into a long-term strategy to capture valuable keywords will lessen the reliance on paid media. However, this requires a sustained investment over a period of time to reap the rewards. Given that we expect inflation to be an issue for a few years, this should start as soon as possible.
Many brands are choosing to spend their resources at the point of purchase and post-purchase, rather than openly compete for prospects. As well as having a great UX on the site, brands need to build loyalty and recommendation engines via eCRM and social as a way of retaining and growing business.
Integrated media planning
Savvy brands are spending more money, or at least testing media spend, across a wider number of channels. For a long time, many brands have focused their spend across two companies, Meta and Google. Given the measurement challenge with Meta right now and what is coming down the line with Google, brands are focusing more money further up the funnel and also including wider channels.
We are seeing more experimentation into wider channels including TikTok, Influencer, DOOH and Ocado coupons.
All of this requires brands to be more open-minded than ever before, and to be less reliant on a small number of digital channels. Not all these options will be right for every brand, but now is the time to review what is working and what is not, and to start thinking more holistically.
Article first appeared on The Drum here.