What happens to media mixes during a recession
History shows economic downturns disrupt the media landscape
Written by
Michael Murray
October 1, 2022
4
min read
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History tells us marketers re-stack their media mix during an economic downturn.
Data on The Great Depression (McCann) showed newspapers lost share of ad spend to magazines and radio.
The Dot Com Bubble saw another restacking of the media mix (though changes were smaller due to the shorter duration of economic upheaval), as did the Great Recession of 2008. From 2007 to 2017, Digital reached 41% of the ad market, up from 10%.
Digital’s share now represents more than 60% of the ad market.
Media fragmentation – new entertainment options – is pulling category buyers away from previously efficient mass reach channels. Linear TV is the most effective media channel for reaching consumers en-masse and building brand equity. Yet, costs have increased 31.2% since 2019 – “the steepest incline in over two decades,” Warc reports. Incremental reach is becoming more expensive and difficult to obtain.
Marketers are already restacking their media mix. Three trends continue to disrupt how marketers reach and build mental availability with category buyers.
According to Cisco, video accounts for approximately 80% of all internet traffic. From an advertising perspective, COVID was a big disruptor/factor. The share of Digital's non-Search grew larger, rising from 34% share in 2019 to 45% in 2021, driven by online video, eCommerce, and streaming (not to mention TikTok, more recently).
It used to be that Linear TV was the base upon which “everything else” was layered. John Spiropoulos of SMI Insights writes, “TV’s scale became a drug of quick reach with little effort. Brands are coming off the high.” What's the outcome of this? For one, it means more change. As Spiropoulos writes, "the Video market is ripe for change, as it’s in a years-long transition to streaming."
Last Solve for X, we reported that “streaming services are proliferating (Walmart is adding streaming on top of their ads business), and content formats duplicating (Amazon is trialing TikTok-style ads).” This proliferation & fragmentation of media channels represents a shift: in the old world of linear TV, we had an abundance of attention and a lack of media. But now, the opposite is true.
The internet is doing to Linear television what it did to music. Streaming is taking an increasingly greater proportion of advertising spend as Linear TV remains expensive (even Netflix is pricing its CPMs at $65 – making it more expensive than the Super Bowl). As more players enter the advertising game, it’s worth considering the approach they take. Mark Ritson argues that “New media platforms shouldn’t play by old media rules.”
Scott Galloway writes that “ Fifty-five percent of TikTok users create their own videos on the platform. That’s a talent pool the depth of the Mariana Trench: 870 million people, or 1,000 times the number of people employed by the entire film and TV industry.”
Marketers must adapt to this new media world. People have unprecedented choice and control over what content they decide to consume. They’re in the driving seat.
People now watch a wider variety of content. Long-form, short-form, studio-produced, creator-produced: what people find entertaining, relevant, and attention-worthy is no longer defined by format or production quality. As Ben Jones, Creative Director for Google, writes, quality is “measured by relevance, intellectual stimulation, sensorial experience, and emotional resonance.”
It’s not enough to simply scale content production to keep their brands front of mind in a relevant and engaging way. Marketers must ensure their content is fit-for-platform, engaging, on-brand, representative, accessible, and so much more.
Why does any of this matter?
Creative is the largest lever to increase advertising profitability and lift sales. 20 years of using data to optimize targeting mean the industry is now gripped by measurement bias: despite being 1/12 as effective as the creative, targeting is considered a larger driver of advertising profitability. The industry suffers from an empathy gap. Advertisers are not their audience. And yet, despite an evolving content landscape, advertisers remain wedded to 30-second adverts built for linear TV.
It’s time to change.
Last year, we analyzed 1M ads that correlated ads that feature digital-first and audience-first creative principles like Meta's Brilliant Basics and YouTube’s ABCDs with media efficiencies. The analysis found that for every 10% increase in creative quality – as measured through a Creative Quality Score – brands could see:
This month we released a new analysis of 122,000 Meta In-Stream video ads - representing $48M in ad spend. The analysis showed a correlative link between Meta’s applied platform best practices and more efficient media metrics. For every 10% increase in creative quality, brands could see:
If a brand has a Creative Quality Score of 20%, a CPM of $5, and an ad spend of $100m, they could expect to see 5.6 billion more Meta impressions by increasing their CQS to 80%. Alternatively, by increasing their CQS, they could buy the same number of impressions for $22m less. To see the same efficiency gains combined could cost the brand $162M.
The industry is experiencing a video supply-side crunch as more people spend less time on television, a media channel traditionally built on passive attention and “a greater volume of ads compared to most digital media.” Spiropoulos writes,
“And therein is the supply crunch: more viewers are Cord-Nevers or are Cord-Cutters, consumers are moving to digital streaming platforms, publishers are making more of their library content available only through their own streaming platforms, and streaming has fewer-than-TV ads or no ads at all.”
Marketers should look to mitigate these rising costs through creative improvements. Even a small increase in best practice adherence can result in a big impact on In-Stream video spend efficiencies. The same can be said for other channels too.
All of the following changes may seem tactical but viewed in light of modern media budgets, the scale of the efficiencies quickly becomes an effectiveness gain.
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