As the end of the year approaches, traditional practices among ad buyers in the marketing sector are experiencing notable shifts, primarily attributed to evolving budget management strategies and a continued focus on performance marketing. In a landscape where many marketers would typically rush to spend leftover ad dollars before the year's end, this trend appears to be diminishing, particularly for companies with substantial ad expenditures of $300 million to $400 million annually.
Historically, the end-of-year spending season was often characterised by what some refer to as "irrational budget dumping," where ad buyers hastily allocated funds to avoid losing them in the new fiscal year. However, as outlined in a recent report by Digiday, the shift towards more disciplined, quarter-by-quarter planning has resulted in a more strategic approach to advertising budget management. Media buyers are now required to provide not just any spending, but performance-driven strategies that meet specific sales targets.
Mike Feldman, senior vice president and global head of retail media at Vayner Media, noted the change in mentality, stating, “Historically, we used to get like a million dollar last minute asks in the year to ‘use it or lose it.’ Now we are getting last minute asks on how we can hit sales numbers.” This sentiment is echoed by Zach Ricchiuti, an associate vice president at Kepler, who remarked that the practice of last-minute spending requests has significantly reduced this year compared to prior years.
Marketers are now focused on ensuring any additional budget is allocated in a manner that is accountable and likely to yield measurable results. Strategies might include leveraging creator affiliates, activating additional channels in programmatic advertising, such as Amazon's demand-side platform, or experimenting with retail media options. As one anonymous buyer noted, there is a heightened focus on using funds where they will be most effective, stating that marketers are seeking ways to “juice your performance machine.”
In parallel with changes in spending behaviours, a recent survey conducted by German agency network Serviceplan revealed broader trends among European Chief Marketing Officers (CMOs). This survey included responses from 835 marketers across markets such as Germany, Britain, France, and the Netherlands. Notably, 51% of these respondents did not foresee improvements in the economic landscape for the coming year, while only 21% believed conditions would improve, marking a decrease from previous optimism. In the UK specifically, 44% of marketers anticipated an increase in marketing budgets, although there remains reticence towards sustainability as a priority focus in comparison to advanced technologies such as AI and marketing automation.
The sentiment towards artificial intelligence in marketing has continued to evolve, as agencies increasingly seek clarity in their partnerships with AI-driven tools and staff. An unnamed agency founder and chief creative officer articulated a growing concern, stating, “The conversation now is, ‘I want to see your AI staffing plan’ and ‘I want to see specifically the people that are working on my business that are AI pilots.’” This reflects a broader recognition of the role AI could play in shaping marketing strategies and potentially influencing job roles within the creative sector.
In summary, as year-end advertising dynamics shift towards greater accountability and performance-based spending, the marketing landscape is undeniably impacted by economic conditions and emerging technologies. With ad budgets being closely monitored and increasingly data-driven, agencies are adapting to these trends, poised to meet the challenges that come with evolving consumer behaviours and technological advancements in the industry.
Source: Noah Wire Services