We’re living through the worst cost of living crisis seen for decades. Fortunately, the UK has not technically reached a recession point yet, though Fortune Magazine predicts it’s still on the horizon. We are, however, living through a cost-of-living crisis which no doubt will see the public’s dispensable income squeezed and many businesses struggling.
As in previous recessions, most businesses know they need to adapt during the cost of living crisis and reevaluate how they’re managing budgets, targeting customers and measuring up against their competitors. Those who don’t will struggle more than they might in more comfortable economic periods, where making mistakes can have less severe consequences.
Business leaders know that cutting marketing spend during times of economic uncertainty doesn’t pay. Reduce your output and you’ll inevitably see a decline in sales. However, that’s not to say you shouldn’t reevaluate how your advertising budget is used. The current cost of living crisis is a good time to start being more discerning. To ensure you are utilising all the technology, knowledge and tools at your disposal. Creating powerful ads and increasing your conversion rate.
The Challenges Of Advertising In A Cost of Living Crisis
A recession is a period of time in which the economy experiences a downfall; trade and industry are reduced and consumer spending is in decline.
So, how does this affect advertising? Advertising in a recession presents many challenges. Essentially though, wasted advertising spend could severely impact a company’s ability to ride out a recession. Many studies and research articles delve into wasted advertising spend and, though experts generally differ on the exact rate of advertising success versus spend, there is much evidence to suggest that the rate of failure is undesirably high.
When a company is doing well, advertising becomes a numbers game – throw everything at it and see how much sticks. If your profit margin is high, waste advertising spend matters less because you’re still reaching enough invested consumers. When margins are lower, as they often are in a recession since the cost of production and labour tend to rise, then advertising waste becomes unaffordable. You need to convert a higher percentage of those you are spending money to engage with.
When advertising in a recession, you need to be leveraging data and expertly targeting your content, because if you can increase relevancy you’ll increase your conversion rate.
How Can The Relevancy Of Advertising Be Increased During A Cost of Living Crisis?
Relevancy, in terms of advertising, refers to how closely the adverts presented to a consumer match their search or the content they’re engaged with. Targeting the public with display billboards as they walk down the street may be eye-catching but relevancy is harder to determine. Whereas online, we have the benefit of data input which enables advertisers to be responsive in targeting users more likely to engage with their products or services. But, is your business doing this as well as it could be?
Increasing ad relevance during a recession is essential. To improve advertising performance and maximise your ROI, you’ll need to focus on:
- Where and when your adverts appear
- The format in which your adverts appear
- Adapting the tone of your messaging to the consumer
- Condensing the consumer journey from interest through to acquisition
Let’s look at each of the above in more detail:
When messaging is out of context it’s more than ineffective, it risks damaging the brand. Members of the public expect technology to enrich their lives and serve their needs. They do not want to receive messages they perceive to be irrelevant. When a business does this, especially repeatedly, its brand reputation may be harmed. So relevancy becomes about context. The goal is to approach potential customers where and when they are likely to be reciprocal.
Admessenger Intelligence allows advertisers to better target customers by expertly using keywords to identify what the user is looking for. For instance, when researching for ‘car repair tips’, adverts for expensive new cars may be considered an unwelcome interruption, whereas adverts for car parts relevant to the issue they’re attempting to resolve would be highly relevant. This improved targeting can be achieved through our platform, which crawls page content using keywords to detect where your advert may be relevant to the user. This approach, together with our technology, enables you to better target potential customers, improving advertising performance and greatly reducing waste ad spend.
This above search example also brings us back to the difference between advertising in a positive economic climate and advertising during a recession because clumsy targeting can easily become offensive. Advertising that seeks to encourage consumers to be financially irresponsible or frivolous during a recession, is likely to have a negative impact on the reputation of your brand. This leads us nicely to the importance of the tone of advertising during a recession.
Tone Of Advertising Communications In A Cost of Living Crisis
A common marketing mistake during an economic downturn is to double down on the urgent nature of the messaging. Not only does this reek of desperation but it can damage your brand’s image. Advertisers need to be thinking ‘smart’ rather than using the scattergun approach, especially when public spending is conservative.
This being, messaging should be kept simple and to the point and avoid sensationalist language. When the content a user is consuming is interrupted by an advert, not only does that advert have to be relevant but you’ll have to let the user know it’s relevant straight away because they won’t be looking at it for more than a few seconds. Therefore, concise communications work best.
By all means, stand out – highlight important words and use colour and emotive language, but keep your message on point. Many advertisers spend a lot of time ensuring that they appear in the right places at the right time and then plummet their conversion rate by using an inappropriate tone or forgetting what they need to communicate. During a recession, you must understand two things:
- Why the consumer would benefit from your product or service
- Why the benefits will outweigh the costs
If you cannot answer the above questions in your advert then you may struggle to win over consumers in a recession. Furthermore, you must be able to communicate these arguments quickly and effectively.
Delivery Of Advertising In A Cost of Living Crisis
How your message is delivered to your target audience is key. Advertising is a vast and complex machine largely because there are so many ways to do it. However, the potential customers are not just shoppers. Internet users are huge consumers of content. When consuming online content users are engaged, poised to be inspired and keen to make connections. That being, inserting yourself into or between relevant content is an excellent way to improve your conversion rate. Furthermore, this can build trust, familiarity and positive brand association.
However, audiences have learnt to ignore certain spaces on a webpage. Boring banners, for instance, can have a low CTR now that consumers are used to this space being used for largely un-targeted advertising. Whereas scrolling ads are highly effective when the message is clear and concise. Scrolling ads are a smart mobile advertising solution that enables businesses to reach a highly targeted audience whilst they are already engaging with content that has a connection or relevance to your products or services. This makes Admessenger’s proven ad format a highly successful solution, especially during economic instability. It meets the demands of advertising in a recession because:
- Admessenger’s scrolling ads are concise and suitable for audiences with less time or shorter attention spans.
- Scrolling ads appear as the mobile user engages with content so it’s part of their journey, not an unwelcome interruption (such as boring banners or pop-up adverts).
- Admessenger’s content scroll technology allows us to highly target adverts to improve CTR and advertising performance, ultimately delivering you a higher ROI.
A customer’s journey does not end when they click on your advert. In fact, when advertisers are investing in CPC ads the business starts paying when the customer clicks through. So, a healthy percentage of clicks need to result in sales.
To do this you should be taking consumers on a short but pleasant journey. With dwindling attention spans, growing consumer choice and a cost of living crisis to navigate, advertisers are going to miss out if they don’t ensure the user experience is:
- Easy to navigate
- Engaging and persuasive
- Calls upon the customer to take action (buy/like/share/contact, etc)
Customer experience is a science that considers the entire customer journey from click to purchase. However, you can usually improve your customer journey by ignoring the fact it is a virtual experience and imagining it as a real in-person customer interaction since most of the same practices and sales techniques still apply.
Campaign tracking is also essential to identifying and addressing wasted advertising spend and poor advertising performance. You’ll want to be able to pinpoint any points at which you’re losing customer interest. It may be that your adverts are not achieving a high click-through rate (CTR) or it may be that they’re performing well but the conversion rate from click-through to check-out is low. Either way, the more analytics you have to hand, the more responsive you can be and this will be essential to success, especially in a recession.
Interested in improving your advertising performance? Tired of ineffective boring banner ads? Admessenger’s Scrolling ads may be the solution you’re looking for. Get in touch today to learn more about how our mobile advertising solution could increase advertising performance.