In this guest post Chi Lo, director of accounts at The Trade Desk, delves into how brands can stay connected to consumers as the cost of living rises…
With the Reserve Bank of Australia announcing a second interest rate rise earlier this week, the uncertainty around inflation is impacting the spending habits of Australian households.
In fact, eight in 10 (80 per cent) Aussies have already made changes to their purchasing habits in response to the rising cost of living pressures, according to research recently released by the advertising technology company, The Trade Desk.
With interest rates set to climb across the second half of 2022, cost-of-living concerns will likely continue to deliver uncertainty to the Australian population. In response, brands should consider being agile in their approach to consumers and adjust campaigns to meet consumers’ changing needs.
Forty-four per cent of Aussies surveyed reported they will be actively looking to buy from cheaper brands or stores whenever possible as they believe the impact of rising inflation will play a role in their purchasing decisions in 2022.
That means these and many consumers are thinking harder about which products they buy, where they shop, and how often. If things weren’t hard enough already for advertisers, the situation is exacerbated by supply-chain shortages and the conflict in Ukraine. As with any period of economic uncertainty or volatility, the better a company can market its products, the more it stands to gain share. Indeed, two years of a global pandemic has shown many marketers the importance of precision, ROI, and agility.
Brands that may not necessarily want to pass the increased costs to consumers may experience thinner margins during this time.
As a result, inflation has put a lot more pressure on brands to be deliberate and to make every media dollar work as hard as possible. Budgets will likely remain stretched and prioritising media that is measurable and comparable is key.
Since market conditions can change at lightning speed, brands should embrace the opportunity to leverage data-driven advertising with the flexibility to take full control and leverage every data point available to purchase each impression based on its value relative to their short and long-term business objectives.
And while more than two-thirds (68 per cent) of Australians surveyed are expecting the pressure on households to get worse in the year ahead, the good news is marketers have an opportunity to set smart consumer engagement strategies now.
Marketers should consider adopting strategies in the brand loyalty arena to help cope with the influx of economic challenges. In particular, leaning into data to become more precise with ad spend. This means really understanding where audiences are and understanding their spending habits.
That’s important because it’s not just family household budgets who are looking to change spending behaviours. Gen Xers and Millennials, 87 per cent and 85 per cent respectively, have changed or are also looking to change their purchasing habits due to the increasing cost of living.
To meet the evolving needs of their customers, brands can use programmatic advertising to launch and pause campaigns in real-time; scale spending up or down at will; and swap creatives on the fly. Nimble companies will fare better than others if they are able to adapt their businesses, pivot their messaging, and appeal to consumers as their needs change.
Throughout the uncertainties of the global pandemic, marketers have learned the importance of precision, measurement, and agility and those lessons can be applied in this new environment of inflation and interest rate uncertainty.
Developing data and consumer engagement strategies now will put brands in the best position to establish successful brand activation throughout this period and keep the relationship with their valued customers.
In this opinion piece, Patrick Sim, senior vice president for the APAC and MEA regions at Epsilon (pictured above), talks about ways companies can go about building lasting relationships with their clients. If there’s one thing that companies have learnt from the pandemic is the importance of keeping customers happy and having them continuously come […]
Across the world, rising costs are causing anxiety and financial struggles for consumers. The worldwide impact of inflation is affecting their outlook and behaviour. More than half of consumers globally are struggling financially because of inflation and the increasing price of fuel, housing and everyday goods. Russia’s war on Ukraine intensifies their concerns around supply-chain […]