Digital Advertising Strategies For An Uncertain 2023
Headlines about ad spending are consistent: while the sector is forecasted to grow, the growth is likely to slow to pre-pandemic levels. Advertisers are trying to anticipate the impact of rising interest rates, inflation, and a potential uptick in unemployment thanks to mass layoffs in media and technology.
The result: advertisers feel the need to be more vigilant about their ad dollars and pursue malleable strategies. They want to be able to shift gears if their spending isn’t showing a return on investment. Here are some tips for scenario planning for an uncertain year.
Look At CPMs
A CPM (cost per mille) is an industry term that means costs per thousand impressions. It’s the cost for advertisers to purchase particular ad placements, and it rises and falls based on competition and the perceived value of the respective audience. For example, CPMs traditionally rise during the holidays because there’s more competition.
“We see CPMs go from a high of 100% in November, thanks to Black Friday and Cyber Monday, to a low of 70% in January,” says Debra Fleenor, Founder and President of Adapex, an adtech provider. “We have seen it year in and year out over the past 11 years.”
CPMs also vary by vertical, depending on our economic and social conditions, and the data offers some interesting insights. Adapex assessed data from their publishing partners over the last three years and reported that the CPMs for three categories have gone up consistently: personal finance, real estate, and style and fashion. These upticks tell us about where advertisers are focused in response to evolving contexts, like the pandemic.
“It’s also important to assess eCPMs,” continues Fleenor. “Essentially, eCPMs measure how effective an ad placement or campaign is, which allows advertisers to optimize accordingly.”
Understanding varying CPMs and how to measure their impact is powerful for advertisers for a few reasons. First, having a grasp of CPM seasonality will help you with media planning. For example, if you’re not a retailer dependent on holiday spending, you may decide to invest differently during the holiday season to avoid higher impression costs. Moreover, understanding CPMs by vertical may give you some insights into competition which can help with budgeting and forecasting and even hint at some macroeconomic trends. Finally, understanding the effectiveness of your campaigns with varying CPMs allows you to assess return on investment and get the most out of ad budgets.
Scrutinize Data
Now is the time to make sure you have infrastructures set up that will yield meaningful data about your ad spending. Scrutinizing return on investment by channel helps eliminate unnecessary ad spend and allows more focus more on the channels that are most effective.
For example, if you have an email marketing campaign, a social media campaign, and a programmatic campaign all advertising the same holiday special, ensure that you’re able to track conversions by channel so that you can optimize your strategy accordingly. It’s worth noting that advertising on multiple channels can strengthen various parts of the ad funnel. Awareness on one channel can lead to conversion on another. Take this into consideration when you’re manipulating your spending until you come up with a combination that gets the best return.
You should also look at behavior based on consumer profiles. Be intentional about creating audience segments and look at your results by segment. This will help fine-tune your targeting to get the best results.
Partner With Publishers On Scenario Planning
Publishers are dependent on ad dollars to stay afloat but advertisers are becoming more reluctant to commit to upfronts that offer little flexibility. Advertisers understandably don’t want to commit to fulfilling ads that aren’t working.
“The state of the advertising industry provides opportunities for publishers to both expand and optimize their offerings,” says Ian Bell, CEO of Digital Trends Media Group, a consumer-focused publishing conglomerate. “Our advertisers are working with us to get the most out of their ad budgets by diversifying their spending between full-funnel campaigns and branded content.”
Understanding the interests of both parties will allow you to work together to support shared goals. After all, you both benefit when your digital ads are effective. It’s important to talk to your publishing partners about scenario planning and work together to optimize campaigns.
While the road ahead for advertisers is uncertain, shrewd strategists will use it as an opportunity to differentiate from competition. By focusing on scenario planning, analyzing data, and understanding the levers in the industry that are controlling costs, advertisers can become more effective brokers.
