Rates of inflation may be falling around the world, but advertisers are still feeling the effects, along with problems from the rising interest rates central banks have used to combat it, according to our recent International Macroeconomic Effects & Perceptions research.
Advertisers in France and Brazil are especially likely to say these issues are having negative effects on their business. Almost two-thirds in France complained of the effects of elevated inflation rates, and three in five of rising interest rates. In Brazil, the shares were reversed, with about two-thirds citing rising interest rates and three in five citing elevated inflation rates as negative for their business. Majorities in Japan, the US, and the UK also reported negative impacts from both inflation and rising interest rates.
In many cases, these macro issues are leading to the dual problem of rising operating costs along with falling consumer spending, with most advertisers in all markets studied saying they are rethinking their messaging in order to compete for a share of consumers’ smaller discretionary spending. Publishers hoping to attract spend from these struggling advertisers can benefit from offering robust options for creative testing and optimization–and advice about what types of messaging seem to be appealing to their audiences today.
Beyond updating messaging, though, advertisers in different markets are taking somewhat different approaches to the situation. In the US, most are shifting budgets both out of underperforming media as well as into high-performing media–with CTV and social media the most likely beneficiaries. In Europe and Brazil, advertisers are more likely to be changing their campaign focus away from new customer acquisition and toward increasing loyalty or lifetime value of existing customers. Media sellers must be ready with options to meet the needs of advertisers that are pivoting to customer retention as well as those still focused on other performance KPIs including acquisition.
Publishers should also double down on messaging about the value of their audiences. In most of the international markets we surveyed, we found that the ability to reach advertisers’ target audience was among the top two factors determining whether they will invest in paid media from specific partners–and that includes media sellers as well as ad tech partners like DSPs.
Nicole Perrin is SVP Business Intelligence at Advertiser Perceptions
