Worried about inflation? Absolutely! That’s the reaction of 250 US marketing decision-makers who responded to a recent survey of 250 major B2C, B2B, and DTC companies. So what are these top digital marketing experts predicting?
The bad news:
A huge majority (84%) of Americans are likely to change their buying habits over the next few months, driven by inflation.
The good news:
Smart marketers can quickly recraft their digital strategies and keep pace with these shifts in consumer attitudes and behaviors.
Almost half are leveraging innovative promotions that encourage customers to convert faster, staying loyal to brands. Just as significantly, 48% are rethinking the value propositions they showcase as comparative advantages.
They’re also tweaking content across multiple channels, acknowledging customer concerns about their current realities. But as consumers start using more devices across multiple platforms, their behaviors must be tracked accurately.
Does Inflation Sway Digital Marketing Spend Trends?
Inflation is having significant impacts on digital marketing spends. As the cost of goods and services increase, some businesses are allocating more budget funding to marketing and advertising in order to maintain market shares and attract new customers.
This can boost digital marketing spends, while businesses must maximize returns on marketing investments and reach their target audience effectively. However, inflation can also pump up digital media advertising costs. This undermines the ROI for digital advertising as advertisers must pay more for the same exposure.
The other side of the inflation coin is decreased consumer spending and sluggish economic growth. This weakens demands for marketing and advertising services, as many businesses cut back on their digital marketing spend in order to stay afloat.
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Marketing Investment Trends across Social Platforms
Investment trends across social platforms are constantly evolving, as businesses reach out to their target audiences in new ways. Key marketing trends currently include:
Heavier investments in social media:
Social media platforms have become increasingly important for businesses advertising directly to their target audiences. As a result, many businesses are investing more in social media advertising, including sponsored posts and influencer marketing;
Shift towards video content:
Video content has become increasingly popular on social media platforms, and businesses are investing more in video advertising to capture the attention of their target audience. This includes both short-form video content, such as Instagram and TikTok, as well as longer-form video content on YouTube;
Focus on audience targeting:
Businesses are investing more in audience targeting technology, such as data and analytics, seeking in-depth understandings of their target audiences, presenting more relevant content and tighter-targeted messages;
Thriving e-commerce on social media:
Social media platforms, such as Instagram and Facebook, have introduced e-commerce features, allowing businesses to sell directly to their target audiences. Consequently, companies are investing more in social media advertising to drive sales and establish new touchpoints with customers;
Emergence of new social media platforms:
As new social media platforms emerge, businesses are investing in advertising on these platforms, exploring their potential, and testing new audiences.
Brand Responses to Shifting Consumer Challenges
Consumer challenges change swiftly, steered by local preferences and global events. So brands must rework their marketing strategies constantly, if they want to remain relevant to their target audiences. Some of the ways that brands are responding to shifting consumer needs are:
Embracing sustainability and corporate social responsibility:
As consumers become more environmentally and socially conscious, brands are responding by embracing sustainable practices, reducing their carbon footprint, and taking steps to address social issues;
Personalization and customization:
Consumers want products and services that are tailored to their unique needs and preferences. Brands are responding by using data and technology to personalize their content and messaging actions;
Focusing on health and wellness:
As consumers place a greater emphasis on health and wellness, brands are responding by offering healthier products, promoting active lifestyles, and providing resources and tools that help consumers achieve their health and wellness goals;
Closer attention to customer experiences:
With the rise of e-commerce and digital channels, brands are placing a greater emphasis on providing an outstanding customer experience, including fast and reliable delivery, easy returns, and exceptional customer service;
Innovative technology uses:
Brands are using technology, such as artificial intelligence and augmented reality, to enhance the customer experience and deliver new and innovative products and services.
Market-wide impacts of inflation are forcing businesses to rethink marketing strategies, digital spends, and investment paybacks. That’s why smart marketing executives are already tweaking their digital budgets, seeking new (and more cost-effective) ways of reaching their marketing goals.