Earnings reports from social media companies are coming out this week, including those from Twitter and Facebook, and ad accounts from much of their business.
But when Snap Inc. reported earnings last week, the company flagged issues that could hurt ad demand. The problems are familiar – supply chain problems and inflation.
Most people who work in advertising will tell you that ad spend is a good measure of where companies are headed for the economy. Deloitte Digital’s Mark Singer said that while brands are worried about a possible recession, marketing is on the chopping block.
“Marketing is the first to go, and it’s the leading indicator when the economy comes back because it’s the first to come back. We don’t recommend our customers do this,” Singer said.
It’s actually time to continue to invest in marketing, he said, or even invest more in building brand loyalty. And digital is where they should be investing their ad dollars, especially during a pandemic that has kept people online more than ever.
“We’re seeing influencers making leaps and bounds,” Singer said.
According to Tina Moffett, principal analyst at Forrester, social media is seeing the strongest growth of advertising in general. It’s not just because it’s where consumers’ eyes are, it also gives brands the best value for money. Campaign effectiveness is easy to measure and ads can be targeted to consumers in specific geographic markets.
Moffett said it’s really helpful if your product is readily available in New York, but it would take too long to get to New Mexico.
“Because they weren’t going to spend media money in an area to promote a product where they didn’t have it,” she said.
As for inflation? According to Wharton marketing professor Barbara Kahn, it’s about your, “trying to get the consumer to understand that we’re in this together,” she said. “We try to do the right thing. We are a partner with you. We try to create value.
Because in a time when a lot of how people buy comes down to price, explaining why it hopefully increases loyalty and a more honest relationship with a customer.
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