Economic Uncertainty and the Flight to Performance (TV)

Inflation may be up, but consumer spending is strong. Our CEO Jason Fairchild shares how to get the most out of your ad budget in this economy.


Inflation may be up, but consumer spending is strong — here’s why now is the time to focus on performance CTV

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Right now the market is volatile and there is lots of uncertainty among consumers and businesses. The biggest question facing marketers is how to adjust marketing budgets during these uncertain times.

Relax, we’ve seen this movie before and we’ve learned a lot. In 2001 we had the “dot com crash”; in 2008 we had the economic crisis; in 2020 we had the pandemic.

What did we learn from those times that we can apply now? In uncertain times, there has always been a “flight to performance”.

Broadly speaking, marketers have three buckets of marketing activity: Brand/Awareness; Search & Social; and Affiliate. What we have learned is that savvy marketers don’t necessarily pull back spend during times of uncertainty (in fact, there’s plenty of research that suggests the exact opposite), they redirect spend to channels that allow for clear measurability and ROI analysis. So this generally means moving money away from brand/awareness marketing and into channels that are ROAS measurable. We saw this in 2001, 2008, and in 2020. It is the exact model for today.

And this doesn't necessarily mean reducing your marketing budget. If you can increase your overall marketing spend where every dollar spent is ROI positive, why wouldn’t you increase your budget by 50% or more? The logic is pretty simple, but the ROI math can be complicated in some channels, and other channels have historically precluded ROAS measurement — like TV.

Here’s some easier math. Traditional “linear” television advertising may not have digital-like targeting, measurement, and attribution capabilities, but CTV does. Consumers may be reluctant to splurge on that big vacation until the economy settles a bit, but they’re flocking to CTV platforms in droves (there are now 110M streaming HHs in US). More consumers than ever using a channel that drives highly effective performance marketing: Those are numbers everyone can understand.

Choose Performance CTV

It’s not unwise to maintain or even increase your marketing spend during a time of economic uncertainty, so long as you’re smart about it. CTV ads aren’t a magic bullet all by themselves; you also need access to a sophisticated data platform that lets you buy, optimize, and measure the ROI of your campaigns. We built tvScientific explicitly to drive performance. Our platform gives you the ability to measure results, attribute conversions, and optimize for ROAS so you make smart choices about your ad budget. Contact us to learn more today.

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