By Ben Zimmerman, president at SmartMedia Technologies.
A few months into the summer, both the Writers Guild of America (WGA) strike (paywall) and the Screen Actors Guild strike are the talk of my town, Los Angeles, and beyond. Beginning on May 2, 2023, and leading to picket lines across the country, both unions went on strike after they were unable to reach new contracts with major studios. For example, the WGA, which represents over 11,000 screenwriters, says median weekly writer-producer pay has dropped by 23% (adjusted for inflation) in the past decade, citing factors like streaming platforms and shorter seasons for shows.
The strikes have already impacted live shows such as Saturday Night Live and late-night talk shows and threaten to disrupt future productions. They could have even more significant impacts on the broader media buying industry. Networks and streaming platforms rely heavily on advertising, and without fresh content to air, the future of where those dollars will go is unclear. While some streaming services have a backlog of content, advertisers could shift budgets if networks and other services lack new content.
While this isn’t the first time the unions have gone on strike, it’s the WGA’s first major strike in 15 years. That means it’s the first in the streaming era. This time around, advertisers have alternatives to reach consumers such as Web3, social media, podcasts and more. Unlike the last strike, YouTube is a major competitor in the media buying world. While the future of traditional TV advertising is unclear, there are numerous, alternate options for marketers and media buyers. And it may be time for brands to broaden their vision.
The Merits Of Maintaining Media Spend
External factors like the writer’s strike may stoke feelings of anxiety, leading companies to trim budgets. Often, advertising and marketing budgets are the first to be impacted. But I think brands should be cautious about blindly cutting costs in these areas without considering the potential consequences. It’s essential for brands to recognize the long-term benefits of sustaining or maintaining media budgets in the face of uncertainty.
While cost reduction may offer short-term relief, it’s important to consider long-term factors like brand reputation, market position and customer engagement. When brands rush to pull back on advertising and marketing spending, we’re left with an excess of inventory. Publishers and networks, which typically demand a premium when demand is high, are left with unsold ad spaces. As a result, available inventory increases, causing a decline in cost per thousand impressions (CPMs). This oversupply can disrupt the market and devalue the advertising space.
Brands can take advantage of the situation by recognizing the unique opportunity it presents. Lower CPMs mean that brands that continue to invest in advertising and marketing can acquire ad placements at more affordable rates. This allows the brands that stay put to reach a wider audience and increase their brand visibility, while competitors reduce their presence.
How To Smartly Approach Media Spending
This underscores not only the significance of continued media spend but also the importance of smart spending. Here are a couple of strategies to help.
Allocate budgets for social media.
Brands can strategically reallocate a portion of their budgets originally earmarked for TV advertising to alternative channels like social media. Investing in paid social advertising, for example, can help expand reach and target specific demographics. Platforms offer precise targeting options to help your content reach the right audiences. Some may say that social media trends and user preferences change rapidly. However, the shorter lifespan of content on social media platforms might also work in your favor. Social media offers brands flexibility and shorter production cycles, allowing brands to quickly adapt to changing circumstances and experiment with new content and campaigns.
Harness the power of user-generated content (UGC).
Relying on real-life customer experiences can also help amplify your brand during uncertain times. UGC allows brands to continue generating content without relying solely on professionally produced material. In these campaigns, customers can share their experiences, testimonials and stories, ensuring a steady stream of content. Sure, there are valid concerns that lower-fidelity UGC campaigns may not match a brand’s aesthetics, messaging or production standards. However, UGC showcases real customers using your products or services in their daily lives—and this authenticity can help other customers connect on a deep level.
Invest in the future of TV.
It’s not just the writer’s strike casting a dark cloud over the future of ad spend. Data from 2022 projected ad spending to slow down in 2023; however, data from the Interactive Advertising Bureau (IAB) did project one bright spot in 2023. The CTV (Connected TV) market was projected to experience a significant growth rate of 14.4% in 2023, surpassing the overall advertising market’s growth rate. Digital video, including CTV, is predicted to have the highest share of advertising channels, with a 22.4% share in 2023, compared to 19.3% in 2022. CTV allows advertisers to reach their desired audiences by providing more precise targeting capabilities.
Conclusion
So where do you want to be next year? By investing smartly, brands can position themselves to outperform competitors who pulled the string on their marketing efforts. Maintaining media dollars during uncertain times can help build brand resilience. By consistently engaging with customers and promoting their products or services, brands establish themselves as reliable and dependable. This proactive approach can result in increased customer loyalty, trust and market share, ultimately paving the way for future success.
In the face of uncertainty, brands should consider resisting the temptation to make cuts to their advertising and marketing budgets. While it’s natural to be concerned about the impact of an unstable industry, reducing spend can have long-lasting repercussions. By maintaining a consistent presence and leveraging lower CPMs, brands can reinforce their position in the market, build resilience and pave the way for future success. Investing in the future can pay dividends in the long run, positioning brands for sustained growth and profitability.
Read the full article here
