The AdTech industry is undergoing rapid changes as it adjusts to the impacts of data deprecation and ever-changing privacy regulations. At the same time, there are fears of a potential economic downturn. How should you handle marketing in a recession? What should your marketing mix look like? In this blog post, we’ll cover how to navigate this uncertainty and three essential ingredients for your marketing mix.
First, we’ll look at the complexity and uncertainty facing marketers.
Turbulence with Twitter
After Elon Musk’s Twitter takeover in October 2022, half of Twitter’s top 100 advertisers left the platform and started to seek out alternatives.
The retail media boom
In the next four years, Forrester Research projects that U.S. retail media ad sales will double to reach 85 billion by 2026.1
Most of this growth is catalyzed by CPG and consumer electronic brands that have a scarcity of zero- and first-party data; they need more media closer to the point of purchase, especially as CFOs are scrutinizing budgets.
Consumption continues to fragment
It’s becoming harder than ever to reach the right person, at the right time, predict their intent, and get a 360-degree view of your customer.2
Data deprecation is top of mind
According to Forrester Research, updating their data strategy to address data deprecation is the number one priority for marketers. Addressing data deprecation is also a priority for consumers, who increasingly feel that audience targeting is more intrusive than beneficial.3
Data deprecation affects identity solutions
Third-party data and mobile ad IDs (MAIDs) are the connective tissue for identity solutions. As we see those signals go away, there are fewer linkages to resolve identity and it’s leading to a rise in fragmented, duplicated, and shallow identity.
Recession fears
In addition to everything happening in AdTech, there are also fears of a possible recession. According to Forrester, 40% of Gen Z and 41% of Millennials believe fears of an upcoming recession are greatly exaggerated. On the other hand, only 24% of Gen X and 12% of Baby Boomers agree.4
Navigate uncertainty and marketing in a recession
With the current macroeconomic conditions, data deprecation, and fragmented consumption in mind, what should your strategy look like for marketing in a recession? Forrester recommends three strategies:
- People-led planning
- Test creative
- Optimize for marginal costs
People-led planning
Planning doesn’t have to be fragmented. Map offline and online media exposures to consumer decision journeys. Strategies like lifetime value (LTV) driven audience segmentation to correlate awareness at top of the funnel layered with demand generation exposures harvested later in the funnel. To do this, it’s crucial to work with providers that give you visibility into the audience buyer’s journey to awareness, intent, consideration, and purchase, all the way through to loyalty.5
Test creative
Make your creative work harder for you. Apply the same rigor with your creative that you applied to segmentation. Utilize multivariate testing to identify creative that is winning or losing. When you understand how each variable performs, you can scale the variables with creative optimization to have a material impact on performance.
Optimize for marginal costs
Optimize for marginal costs of acquisition, not just the average. Adjust for incrementality – what is the cost to acquire one more customer, rather than the average cost of acquisition.
Find the right marketing mix in a recession
With these changes in mind, how can you find the right marketing mix in a recession? We can show you the way.
You can create the right marketing mix with three key ingredients:
- Audiences
- Identity
- Activation
Let’s explore each ingredient to start you down the path toward marketing campaign success.
Audiences: Know your customer
The first ingredient to add to your marketing mix in a recession is your audience. Knowing your customer is key to targeting the right audiences successfully. Data-driven targeting can help you find your best audiences based on demographics, modeled lifestyles, and behaviors to improve marketing campaign performance.
Not sure where to start when it comes to developing your target audience strategy? We can help. We track digital usage of our data used by advertisers and identified the top four digital audiences that advertisers purchased over the last four years.
Four digital audiences to consider
Marketing strategies are only as strong as the data foundation they’re built on. The top four digital audiences that advertisers are purchasing from Experian include:
- Demographics
- Behavioral
- Modeled Lifestyles
- Custom Audiences
Demographics
Examples include age, gender, relationship status, living situation, life experience, and employment.
Behavioral
This audience allows marketers to identify households that are more likely to engage in certain activities or belong to certain groups.
Modeled Lifestyles
Experian’s Mosaic® USA segmentation. This is a household-based consumer lifestyle segmentation system that classifies all U.S. households and neighborhoods into 71 unique types and 19 overarching groups, providing a 360-degree view of consumers’ choices, preferences, and habits.
Custom Audiences
This is an audience blended from multiple sources or derived from first-party look-alike modeling.
Changes in digital audience strategies
Over the last four years, Modeled Lifestyles and Custom Audience purchases represented the smallest share of digital activation, while Behavioral and Demographic segments were more popular with advertisers.
When the U.S. rolled out the COVID-19 vaccine, consumers became more active. People were shopping in stores, returning to the gym, and taking trips that they had postponed during the height of the pandemic. Marketers turned to higher compositions of Demographic and Modeled Lifestyles to reach these audiences between April and December of 2021.
Sustained growth in Demographic audience activation could suggest a move back to tried and true audience strategies as signals continue to decline and amid evolving regulation. With economic uncertainty, marketers return to what they know. Traditional targeting methods like Demographics and Modeled Lifestyles are the baseline of many marketing strategies and we predict that we will continue to see marketers activating against these data sets.
Download our 2023 digital audience trends and predictions report to discover our full insights on how digital activation has changed and where we’re headed.
Identity: Understand the customer journey
Identity resolution is the next ingredient that you should add to your marketing mix in a recession. It should be a foundational element of every marketer’s strategy.
What is identity resolution? In the simplest terms, identity resolution is the process of matching different devices, IDs, and touchpoints back to a single person. Identity resolution expands marketers’ addressability and reach of their target audience and helps inform and measure accurate customer journeys.
Identity resolution challenges
Identity resolution faces two main challenges:
- Making the data actionable. Humans are complex. We have behaviors that change based on our current social groups and life events, we use dozens of internet-connected devices in a single day, and we exhibit distinct behaviors that happen online and in the physical world. This means marketers have mounds of data being collected from different channels based on that dynamic behavior of people, making it feel impossible to organize the data in a way that makes it feel actionable, know how it ties back to real humans, and ensure they’re doing it in a responsible and compliant way.
- Signal loss. Marketers continue to lose important signals that they’ve previously been able to rely on to inform their next move. Signals are being lost as our industry places more privacy regulations and restrictions on what can be tracked and as consumers themselves change behaviors to protect their privacy.
As consumer behaviors continue to change and signals disappear, identity resolution gets exponentially harder.
Expand addressability and reach with identity resolution
Data deprecation adversely affects identity solutions, but identity resolution should be a key ingredient in your marketing mix. Identity resolution ensures that consumers experience more relevant products, offers, and messaging – allowing you to reap the ROI benefits of hitting consumers at the perfect point in their journey.
Finding an identity resolution partner
When selecting an identity resolution partner, you should understand the data and processes that are implemented behind the scenes. It’s important to know:
- What makes up their consumer database?
- How fresh is their data?
- What identifiers can they match?
- How do they protect consumer privacy?
At Experian, we’re rooted in deterministic offline data which creates a stable foundation. We then layer in digital and behavioral touchpoints. We have decades of experience managing consumer data safely. We have insights on 250 million individuals, three billion devices, and one trillion device signals. Our databases evolve as quickly as the human behavior powering them does.
Our approach to identity resolution is open and agnostic. This means we can collect and ingest nearly all available offline and online identifiers. We can do this in all types of environments, including connected TV (CTV), mobile, and cookieless. We have two types of identity resolution:
- Offline
- Digital
This ensures we control how known and anonymous data points are connected for consumer privacy purposes.
Identity resolution in action
Our depth of data gives our clients access to see the whole human and gain the context around singular data points.
Let’s walk through an example of our identity resolution capabilities.
Challenge
Our TV media platform client needed to measure the effectiveness of an ad campaign they were running on behalf of a leading consumer electronics brand. The TV platform wanted to be able to accurately report on which consumers made a purchase after seeing the brand’s TV commercial on their platforms.
Solution
Using our digital identity resolution services, our client could capture online purchases made on the brand’s website and link them back to a consumer profile. In addition to online transactions, our client used our offline resolution services to resolve email addresses of consumers that purchased offline, using warranty registration details.
With online and offline purchase data now resolved back to an individual ID, we also performed identity resolution on viewers in their TV subscriber files that had also been exposed to the TV commercial. This allowed us to identify subscribers that had both seen the ad and purchased a product.
We provided our client with a packaged report that they could white-label and pass along to the brand.
Results
By providing this attribution reporting to the brand, the TV platform could validate the ROI spent on their platform. The brand was extremely satisfied with the results, and they transitioned the one-off TV commercial into an ongoing campaign and purchased quarterly measurement. This led to solid recurring revenue for the TV platform.
Activation: Experiment and measure the impact
The third and final ingredient to finding the right marketing mix in a recession is activation. Experimentation is the best way to determine which channels work best for your business and provide the most ROI.
Demand-side platforms (DSP), video platforms, and sell-side targeting are three important activation channels that you should consider experimenting with.
Demand-side platforms
We continue to see increased demand for environments where alternative identifiers are being transacted (like DSPs and video). Social channels are decreasing; this can be attributed to changes in privacy, security, and concerns around brand safety.
Amazon’s DSP is catching up with Google and Meta to become a top ad platform.
Video platforms
Digital video and other video channels like over-the-top (OTT) and CTV will continue to grow. Digital video will capture the most ad spend in 2023 (22.4% in 2023 vs 19.3% in 2022). Because of this, advertisers are placing bigger bets on the combination of addressable and CTV.
Sell-side targeting
Data sharing relationships will become strongest on the sell-side as we move toward consented first-party data. Ad dollars are shifting to channels that use the sell-side approach, like retail media and CTV.
Sell-side targeting enables brands to access large amounts of inventory across publishers and retailers. By getting closer to the ad inventory, advertisers can future-proof their strategies by having more access to better data signals. Direct relationships like these will be necessary as privacy regulations increase and signal loss continues.
We can help you find the right marketing mix in a recession
Now is the time to be opportunistic. Gaining share of voice during a downturn is cost-effective. Proactive marketing builds pent-up demand.
Delivering the right message in the right place at the right time means truly knowing your prospects and customers as individuals. At Experian, we bring you the highest-resolution picture of people, so you and your customers can connect with confidence.
You can turn prospects into customers with the right audience. By understanding your customers better, you can find more like them. Together we can power better results.
Find the right marketing mix
Check out our webinar, “Find the right marketing mix with rising consumer expectations.” Guest speaker, Nikhil Lai, Senior Analyst from Forrester Research, joined Experian experts Erin Haselkorn and Eden Wilbur. Watch the recording to learn:
- New data on the complexity and uncertainty facing marketers
- Consumer trends for 2023
- Recommendations on finding the right channel mix and the right consumers
Sources
- 2022 Retail Media Ad Sales Forecast, US. Forrester Research, Inc. 2022.
- Forrester Analytics Consumer Technographics® Technology, Media, and Telecom Topic Insights 1 Survey. Forrester Research, Inc. 2020.
- CMO Pulse Survey. Forrester Research, Inc. July 2021.
- Forrester’s Consumer Energy And Retail Online Survey. Forrester Research, Inc.
- People-Led Planning Solves Customer Problems to Drive Growth. Forrester Research, Inc. August 2, 2021.
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Experian Marketing Services Consumer Expectation Index shows positive outlook for 2012 holiday season Today we released the newest Experian Marketing Services’ Consumer Expectation Index (CEI) analysis of the first half of 2012. As noted in the release, during the first six months of 2012 we reported that consumer optimism has reached an all-time high over the last four years, beating 2008 by 8 index points. The CEI provides us with unprecedented insight into our economic outlook by who we are; men versus woman, age, household income and employment status, to name a few of the 60,000 variables that we have access to. What’s most striking about today’s release is that optimism is up across the board among men and woman and all age groups; even the unemployed increased their economic outlook from an index of 87.6 to 88.0 from the first half of 2011 to the same period this year. As we approach the holiday season, the latest CEI figures indicate a strong seasonal performance for retailers. The CEI figure for the week of Sept. 3, 2012, (the most recent single week for which data is available) was 7.4 points higher than it was at the same point last year and higher than it has been heading into the holiday season since 2008. This holiday season also could be very good for brands and retailers with big-ticket items to sell Further, key consumer groups are even more optimistic. On Sept. 3, the CEI of those adults who made an online purchase in the past year was 2 percent higher than the national average and 8.1 points higher than the CEI recorded for online shoppers at this time during 2011. This holiday season also could be very good for brands and retailers with big-ticket items to sell, since the CEI among adults planning to make a big-ticket purchase hit 117.9 the week of Sept. 3, 2012, compared with 103.5 the same week in 2011 and 100.5 in 2010. In fact, a CEI above 100 indicates that consumers are more confident than they were during the base line period, which was the first half of 2004, years before the recession began. Perhaps it’s all the talk of the looming fiscal cliff that makes today’s release appear to be counter-intuitive. In fact searches for “fiscal cliff” increased over ten-fold comparing last week to the week ending November 3rd. However, if we look for what people were searching for using search term variations, the top searches were “what is the fiscal cliff” and “fiscal cliff definition,” showing that consumers are still learning what the fiscal cliff is and what it means for them. Hitwise "Fiscal Cliff" Search Term Variations Rank Search Term Percent Volume 1 fiscal cliff 48.07% 2 what is the fiscal cliff 6.74% 3 fiscal cliff definition 6.58% 4 fiscal cliff 2013 6.28% 5 obama fiscal cliff 2.83% 6 what is a fiscal cliff 2.40% 7 the fiscal cliff 1.13% 8 what is fiscal cliff 1.06% 9 fiscal cliff looms 1.03% 10 fiscal cliff defined 0.77% Note – data is for the 4 Weeks Ending November 10, 2012 Source: Experian Marketing Services As the population becomes more educated on the looming crisis, we’ll keep tabs on any resulting changes to consumer optimism, specifically which demographics are most concerned. Learn more about the CEI here.
It is time for us to polish off our crystal ball and give our predictions straight from consumers’ fingertips for the hot products of the 2012 holiday season. Gadgets will reign across many ages Tablets including LeapPads, Tabeos, iPads, Kindles and others will continue to be a popular gift this year, with more choices than ever. On the list of top product-related search terms driving traffic to the Retail 500 category of sites, Kindle Fire HD and Windows 8 top the list as new products. Additionally, Meep!, a child friendly tablet appeared in the top fifteen. Accessories for both phones and tablets will also be popular, especially as the variety grows for iPhone 5 and iPad Mini. A reoccurring favorite gift for the holidays is UGGs which shows a decrease year over year. However, another brand with a similar product is Bearpaw, which is in the top ten searches and has seen big growth year over year. Source: Experian Hitwise Dolls, video games and Furbys, oh my! To identify the popular toys for gifts this year, we researched product-related search terms driving traffic to ToysRUs.com compared to last year’s holiday season. We uncovered trends in the doll category, Doc McStuffins as number one on the list, along with the classic Barbie, which saw a growth in searches year over year. The Furby is making a strong comeback at the number two spot with a reboot and new features. Another trend here is tablets, from branded searches like LeapPad and Kurio there is also the generic term ‘tablets for kids’. In the video game category, the new Wii U that is debuting just in time for Black Friday and should be a big gift this year, along with searches for PS3 games and the Nintendo 3ds xl are all in the top 20 searches. Source: Experian Hitwise Keywords of the consumer to identify demand Beyond product names, it is important to understand the actual way people search, using key phrases and questions. Last year, for example, there was a lot of activity around ‘in-stock’ products, such as the LeapPad explorer, which was hugely popular and quickly sold out in many stores. Retailers and marketers should monitor this throughout the season and make sure to optimize for in stock if there is a popular product that they have available. Source: Experian Hitwise Consumers also focus on what is the ‘best’ – so we see search activity around ‘best place to buy’, particularly around electronics. Questions such as ‘where to buy a’ specific product are also common, such as ‘where to buy a kindle’. These phrases offer opportunities to boost search campaigns by considering how consumers phrase their questions to ensure to capture these searches. Source: Experian Hitwise Quick tip: In the retail category there will tend to be a lot of retail branded store terms but to keep up with holiday search behavior and help make analysis quick, create portfolios of branded terms to easily exclude those from a certain category. When you strip out all the variations of that term you are able to gain insight into product searches that are most popular to a certain site or category. For more insight on the hot product trends for this year from our Hitwise trend-spotters, watch our webcast.
The holiday season – a most wonderful time of the year for retailers – is underway and marketers are tweaking their campaigns for better customer engagement and enchantment. There are many channels in which to reach top customers and prospective customers, and the new holiday season is a great time to refine strategies and tactics to ensure success. To help marketers in their quest, Experian Marketing Services recently conducted a market research study and learned that email marketing trumped all other tactics as the most successful initiative during the 2011 holiday season. Of the 84.2 percent who used email marketing, 95.8 percent reported that their campaigns were successful. Ninety-three percent said they planned to increase or maintain the same level of investment for the 2012 season. In addition to email, the study showed that paid search and online display advertising were the next most successful marketing tactics of the 2011 holiday season, with 48.9 percent naming search and 34.8 naming online display advertising as extremely or very successful campaign tactics. Our internal experts are currently looking at real-time data around these and other marketing channels and will present what they’ve learned during a live webinar on Thursday, October 25th at 1:00 p.m. EST. This information should prove very helpful to marketers who want to improve their campaigns based on current trends and results. Register for the holiday webinar and you’ll receive all of the survey data in the form of a 2012 holiday marketing white paper. Here’s to a joyous and profitable holiday season!