How to get smarter on where to spend your next dollar: Growth Marketing Report sneak peek
In times of economic uncertainty, every marketing dollar counts. Marketers must think long-term and be strategic with budgeting and investment priorities to get the most bang for their buck. A tried and tested mindset for success during times of uncertainty is to be proactive rather than reactive. With the economy in flux, brands must rethink their growth strategy and focus on channels that yield the highest return on investment.
While the economic climate may appear cloudy, that’s not to say there aren’t brighter days ahead. Just because the economy is slowing down doesn’t mean you should: Smart brands know that to stay ahead, investing in the right areas can push you ahead of your competition and better position yourself for future success and sustainable growth. With adequate planning and allocating spending wisely, brands that play the long game will emerge stronger.
Over the last few months, DEPT® surveyed 450 marketing professionals about their growth marketing practices and capabilities. From this survey, we are providing an early look into some insights that will make their way into our Growth Marketing Report for 2023. We’ve identified the top three key focus areas marketers are investing in year-over-year (YOY) and the top three where they will divest for 2023.
Top three digital marketing activities where marketers are investing
Paid search
Staying up-to-date on the latest trends in paid search is essential for marketers. While traditional search engines will remain relevant, new technologies, like chatbots, automation, and social media platforms (Tiktok and Instagram) are rapidly changing the search marketing landscape. While no one can predict the future with certainty, recent trends have shown valuable insight into what’s to come, and savvy marketers will need to adapt and determine how to leverage and capitalize on these trends.
Our survey findings illustrate that brands are adjusting their marketing strategies to better meet audiences where they are and increase intent and purchase by investing heavily in bottom-funnel activities like paid search. The downside of these findings is that marketers may face cost barriers in paid search, making it harder to break into the space. Despite volatility in paid search, it remains a top priority for most marketers. Relying solely on this channel can be risky as it can become expensive and generate diminishing returns over time. As user behavior continues to evolve, there may be opportunities for advertisers to explore other channels beyond Google.
Paid social
The finding of our survey reveals that brands are prioritizing paid social to keep pace with audiences. While there may be a decrease in the number of people investing in paid media activities, paid social is still projected to grow steadily. This could mean that while fewer people are investing, those who do invest may spend more on their paid social efforts.
As we navigate through these strange economic times and engagement becomes more costly, diversifying social media budgets across several social channels is an important consideration for brands to make for more affordable growth opportunities. Paid social provides a unique opportunity to reach new, often younger (we’re looking at you, Gen Z) audiences. Social media platforms like TikTok and Instagram are also typically more affordable than traditional advertising as they focus more heavily on user-generated content. With its emphasis on authentic user-generated content, TikTok delivers a cost-effective way to connect with potential customers, and the low cost of entry will also make it easier for brands to continue using social channels–even amid economic uncertainty. Marketers should continue to embrace the insights, data, and a test-and-learn approach to effectively measure the effectiveness of social media in their marketing mix, which will help inform investment decisions in the coming years.
Video and Audio
The survey results reveal an uptick in investments in brand ads and display ads. Investing in brand ads and display ads helps marketers cut through the noise and differentiate their brand from competitors. These ads help build brand awareness and ultimately cultivate a sense of familiarity and trust among a brand’s target audience. While brand ads are a long-term investment, marketers are likely to grow loyalty and recognition over time with their customers by showcasing the consistency and authenticity of their brand. With their eye-catching flashy banners or images, display ads help generate brand visibility and awareness and highlight special offers or promotions during a recession. Investing in brand and display ads during a recession requires a strategic and forward-thinking mindset. Ultimately, it’s clear that marketers see the long-term value of brand equity and the importance of maintaining visibility to effectively reach their target audience, generate leads, and prepare for the eventual economic recovery.
Bottom three digital marketing activities where marketers are cutting costs
Conversion rate optimization (CRO)
During a recession, it’s common for people to change their spending habits and priorities due to economic uncertainties. Many consumers become more budget-conscious and may reduce spending on non-essentials like luxury goods or entertainment while focusing more on necessities. This shift in consumer behavior can significantly impact brands and the overall economy–not to mention the customer journey. Brands must be aware of these changes to adapt and meet their customers’ changing needs. To truly understand your customers and provide a personalized experience, analyzing their behavior is vital to creating an effective journey map that identifies the most critical touchpoints and delivers relevant content at the right time for a seamless experience.
Despite all of this, we see that marketers consider CRO non-essential and are pulling back as a result. This is a potential area of opportunity for marketers to lean into. By implementing CRO strategies, brands can optimize their website to convert more visitors into customers without spending more money on advertising. This approach allows brands to get more revenue from their existing traffic and increase their revenue without increasing their marketing budget.
Subscription video-on-demand (SVOD)
In an economic downturn, SVOD services offer a wide range of content to be enjoyed from the comfort of your home. This is especially important when people seek ways to save money without sacrificing their entertainment options. SVOD services offer a vast audience base at a fraction of the cost compared to traditional advertising channels. One effective way to reach a captive audience is by strategically placing ads within popular movies and TV shows. By doing so, you can increase brand exposure and potentially reach a large number of potential customers. SVOD platforms also collect valuable user data, allowing marketers to fine-tune their campaigns and make every marketing dollar count.
According to our survey, marketers view SVOD as non-essential, and it is not being prioritized as a result. Some marketers may be underestimating the shifting media landscape and are failing to recognize the growing popularity and influence of SVOD services. This is an opportunity area for marketers to tap into to better reach and engage their target audience and leverage valuable information. With access to demographic, viewing behavior, and preference data, marketers can laser-focus their ads to reach the right audience at the right time.
Out of home (OOH)/ Digital out of home (DOOH)
Marketers are divesting in out-of-home (OOH) advertising. While budget constraints may play a role in this, this is a unique opportunity for marketers to take advantage of in terms of brand exposure and creative engagement. OOH campaigns can leave a lasting impression on consumers, generating buzz and word-of-mouth. Another strength of OOH advertising lies in its ability to focus on specific geographic areas that align with your target audience’s interests–increasing the relevance and effectiveness of your message. While digital advertising has shaken up the marketing landscape, OOH advertising still holds a unique place. It allows marketers to make a mark in the physical world–where impact is felt beyond the confines of a screen.
Another area where marketers are divesting is digital out-of-home (DOOH) advertising which comes in the form of videos, animations, and interactive elements. DOOH provides marketers with powerful targeting capabilities that consider factors like location, time of day, and audience demographics. By harnessing data to personalize ads, advertisers can boost the effectiveness of their campaigns and deliver more relevant content to their target audiences. With DOOH, marketers have the power to capture viewers’ attention and engage them in a way that traditional static OOH ads cannot (However, it’s worth noting that DOOH advertising generally requires higher initial investment compared to traditional static OOH advertising.)
Given its ability to deliver dynamic content, target specific audiences, and leverage data-driven insights, DOOH is a key growth driver that will continue to play an important role for marketers. With the right strategies, effective targeting, and creative execution, marketers can make an impact and drive growth for their brand if they invest in this upper funnel activity.
What’s next?
A recession can be an opportunity for brands to reassess their strategies and refocus their efforts on what truly matters. By being selective, brands can make the most of their budget and concentrate their resources on high-potential growth areas that will position themselves for future success.
This year’s Growth Marketing Report captures the pulse of marketers’ current growth marketing maturity levels and is a valuable tool for determining if marketers are effectively implementing growth marketing strategies. Equip yourselves with the knowledge and guidance to make smart, strategic decisions in the face of uncertainty with DEPT®’s Growth Marketing Report launching later this year.
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