Where and How to Refocus Your Ad Spend Next
Amid the economic turbulence triggered by the COVID-19 pandemic, global ad spend is projected to hit $691.72 billion in 2020, a nearly 3% decline compared to last fall’s forecast. With public health experts warning of a second wave of coronavirus and economists predicting a slow recovery, ad spend in 2021 will also come up about 3% short of earlier predictions. Even at top global brands, a majority of marketers say they’ll be limiting ad spend for at least six months.
In an ironic twist, marketers are curtailing advertising just as screen time has skyrocketed for millions of people working remotely and sheltering at home. Countries in the OECD have seen Internet traffic spike by up to 60% compared to pre-pandemic figures. But with marketing budgets tight and many consumers’ household finances suddenly even tighter, how can brands reach these users in a cost-effective way?
The answer lies in a laser sharp refocusing of spending towards key verticals where consumer demand is strongest, and on advertising channels that reflect changes in consumer behavior. Just as workplaces, schools, and government officials are planning for a new normal rather than a restoration of the pre-COVID status quo, marketers’ plans must acknowledge the reality that the pandemic has ushered in a new state of affairs.
Reaching Consumers Where They Are
People aren’t just going online for remote work and distance learning. They’re also streaming content, and lots of it: Indeed, streaming intelligence provider Conviva recently reported a 26% jump in streaming in the U.S. Meanwhile, with people largely confined to their homes, American shoppers are spending 15-20% more on food, and searches for “food delivery” have soared 113% as consumers also smash records with delivery app downloads. To keep active indoors, U.S. consumers are spending 35-40% more on home fitness, with Peloton and other exercise equipment seeing sales boom.
To reach consumers where they are, advertisers should capitalize on the increased traffic within these verticals. By strategically focusing ad spend on the right types of campaigns, brands can transform eyeballs into conversions.
Maximizing the Impact of Every Ad Dollar
Given where and how consumers are spending their time, what’s the best use of ad spend? To maximize ROI, marketers should concentrate on four types of campaigns: pay-per-click (PPC), product ads, email, and digital news.
PPC campaigns are particularly effective for search, as they’re based on advertisers receiving a specific payout each time one of their ads is clicked on. Traffic from PPC is especially valuable, with PPC visits 50% more likely to yield a purchase than organic traffic.
Paid search ads based on specific keywords and phrases are an excellent way of channeling high-value consumers toward conversion, with 75% of consumers saying that search engine ads make it easier for them to find what they’re looking for. It’s important for marketers not to rely exclusively on any one search engine, given the high levels of volatility in Internet traffic during the crisis.
While it’s essential for marketers to ensure their pages are mobile-optimized, when planning PPC campaigns, marketers can’t afford to lose sight of desktop, particularly since desktop accounts for a sharply climbing share of search during the pandemic.
Product ads, meanwhile, offer a rich display of variety and price options that can spur consumers to the purchase decision. As this category continues to grow, CodeFuel has recently launched a new product shopping ad experience to help publishers boost their revenues. Shopping campaigns with product ads afford even greater visibility for brands without over-relying on e-commerce giants like Amazon for exposure. That’s especially crucial given that Amazon recently cut commission rates for affiliates in key product categories, including furniture and home improvement, grocery, beauty, baby products, and sports. What’s more, opting for product ads is far more effective than relying on e-commerce sites in terms of fostering a stronger brand relationship between the seller and consumer.
Marketers can also achieve a robust ROI by turning to email marketing, which according to a DMA study comes with an astonishingly high multiplier effect: Every $1 spent translates to an average return of $42. Perhaps that’s not surprising, given that more than 50% of Americans report checking their personal email accounts more than 10 times a day. Of course, with billions of people using email, it’s critical that brands segment their email marketing targets, personalizing content according to key metrics like geography, interests, demographics, and so on. To further stretch ad spend, opt for an email campaign on a Tuesday; that’s when emails have the highest open and clickthrough rates.
When they aren’t attending to emails, working, catching a new Netflix special, online shopping, or Zooming with family and friends, millions are checking digital news platforms for the latest on the pandemic and its fallout. From February to March, digital news subscriptions increased 3%, and Comscore figures show that users are much more engaged with news content than before the pandemic – with more users flocking to online news sites, spending more time on them, and viewing more pages. Having a strong advertising presence on news sites can be a significant boon to advertisers, with the caveat that sensitivity and brand safety remain paramount.
In these challenging times, brands are facing unprecedented choices. One of the most important decisions they’ll face concerns the near-term future of their ad spend. Strategically refocusing their spending to track the evolution of consumer behavior can boost the impact of brands’ marketing initiatives, positioning them to effectively navigate the choppy waters ahead.
Tal Jacobson, the General Manager of CodeFuel, has over 20 years of executive experience in the Israeli high-tech industry. Prior to joining CodeFuel in 2018, he served as Chief Revenue Officer and Chief Business Development Officer at SimilarWeb. In 2011, he co-founded Monotizer, a client-side monetization company, where he led marketing and business development. Jacobson also previously served as VP Business at McCann Erickson, as CEO at video collaboration platform Watchitoo, and as VP Marketing & Business Development at Macromedia Israel, which was acquired by Adobe.