Your accounts’ media planning and buying budget may be seriously disrupted as a result of the turmoil surrounding tariffs. Some accounts indicate up to a 10% cut in advertising may be coming. Before your accounts make drastic changes, help them review their plans. Don’t let them make assumptions about which media channels work without careful analysis.

Advertising Balance and The Sales Funnel

It’s tempting to cut back ad spending when faced with economic uncertainty. But data shows that reducing ad spend has negative consequences. According to Nielsen Compass “a brand loses an average of 2% of future revenue for every quarter it stops advertising.”

At this point, brands may want to engage in performance advertising to drive sales. But doing so will be at the cost of brand building – which is the way to attract new customers.  They may also believe that digital advertising is less expensive. But that’s not always the case when considering the bigger picture. This is when a review of media planning and buying should happen.

Nielsen uses the term “long-​term ROI multipliers” to measure the impact from brand advertising. Traditional TV has a reported score of 2.1, meaning format can double the value invested for a brand.

On average, some media channels perform well to drive both brand awareness and sales. This “full-​funnel effectiveness” is seen in digital display, social media and linear TV. Before your clients shift their spending, show them how each media type performs.

The Media Mix

Are your accounts struggling with their media mix? Do they understand how much money to funnel into branding efforts and which media format can be most effective?

Your accounts might believe they know what is best. If their current media plan is working, they might hesitate to break it.  You can help them revise their media planning and buying budgets based on data.  Here’s what’s happening in a couple of key verticals.

Automotive Advertising

Large automotive advertisers, with budgets exceeding $100 million, still allocate a significant percentage of budget (45%) to traditional formats.

Nielsen indicates that automakers still funnel nearly 70% of the ad budget to traditional media overall. Linear TV is the target for most of this spending. For example, NFL events on linear TV draw a huge reach.

For smaller auto retailers, such as local vehicle parts dealers, only 24% of ad spending goes to traditional. Digital media is seen as cost effective for these small businesses.

Retail Advertising

For large retailers, the mix is more balanced. They spend 45.9% on traditional and 54.1% on digital media. For smaller retailers, those with ad budgets of less than $5,000 a year, researchers report a heavy reliance on digital. They spend 33.9% on traditional and 66.1% on digital.

Traditional media budget allocation

Nielsen analysts also reviewed how large automotive advertisers split their spending across traditional media formats. It breaks out as:

• Television 66.4%
• Audio 2.5%
• Outdoor 0.6%
• Digital 28.5% (includes online newspapers, digital radio, etc.)

But the local auto parts store, with spending of under $5,000, has an allocation that is not TV-centric:

• Television 8%
• Audio 4.9%
• Print 1.1%
• Out of home 10.4%
• Digital 75.6%

Medium-​sized Advertisers

Nielsen analysts classify marketers with ad spending of $5 to $50 million as medium-​sized. TV remains a smaller portion of the budget than expected, especially from a media planning and buying perspective. This situation may exist because it’s been too difficult to purchase effectively in the channel. As more brands succeed in purchasing media space in the CTV channel, the format is likely to account for a larger piece of spending.

The Importance of Reach

In Nielsen’s world, ROI correlates with reach. Because reach is the first objective, help your clients identify the best channel and the most affordable formats. In considering reach, marketers shouldn’t assume that digital is always better. If your account’s target audience frequently listens to broadcast radio, advise them to use it.

Nielsen analysts point out that the format costs less than “streaming radio and delivers a higher weighted average ROI.” But a podcast with the right audience can “boost brand awareness” significantly.

You can help your account understand what their competitors are buying during the media planning and buying process. The updated Digital Audit tool in AdMall, available by subscription, also give you great insight. You’ll see the media formats that your accounts’ target audience respond to. From there, they can spend their media budget effectively.

Photo by Mikael Blomkvist on Pexels.