It seems like the holiday season starts earlier every year. This is especially true for advertisers looking to connect with holiday shoppers, given that consumers are shopping earlier and earlier—in fact, 16% of US holiday shoppers have already begun!
Though many of the same themes and trends that shaped last year’s holiday season—such as earlier shopping and price-conscious consumers—will hold true in 2024, there are new factors that will shape the landscape as well. In particular, political advertising for the US presidential election will drive ad inventory prices up and heighten brand safety challenges, adding some additional complexity for marketers working on holiday campaigns.
Considering all of the above, proactive and intentional planning now will help advertising teams to foster meaningful connections with audiences and drive revenue for their teams and clients.
After modest growth in 2022, total US holiday retail sales showed similarly slow but solid growth last year. This is largely due to prolonged economic uncertainty and consequently tighter consumer budgets, as well as a shift in discretionary spending towards services and experiences rather than retail. This year, retail holiday season sales are projected to grow by 4.8%, a sign that growth rates are falling back to earth after outsized pandemic and post-pandemic leaps in 2020 and 2021.
And just how many people will be (or are already) shopping for the holidays? 2024 research from a GWI x Basis ImpactIQ Research Panel found that 95% of all US adults participated in the holidays in 2023, and that nearly all adults are set to celebrate at least one holiday in 2024. Among those who celebrate, 77% say they plan to buy gifts for others this year. And though most shoppers say they plan to spend either the same or a bit more this holiday season, 54% say they feel financially burdened.
As such, while the 2024 holiday season represents a significant opportunity to connect with most US adults, budget adherence and financial planning will be top of mind for many of them. For advertising teams, highlighting discounts, promotions, and budget-friendly options will help ensure that target audiences feel confident in their purchases while staying true to their planned budgets.
With the supply chain issues and economic instability that have marked the past few years still fresh in their minds, 2024 holiday shoppers are concerned about stock shortages, raised prices, and delayed shipping during the holidays, according to the GWI x Basis ImpactIQ Research Panel. As a result, they’ll shop earlier, with the holiday season effectively starting pre-September and lasting all of Q4. In fact, one in two holiday shoppers plan to begin their shopping before Halloween this year. Spooky, right?
Launching holiday campaigns early and incorporating messaging around efficiency and preparedness can cater to shoppers’ desires to avoid delays and out-of-stock items. By promoting early deals and the benefits of shopping ahead, teams can capture the attention of proactive shoppers, boosting early sales. The big takeaway? When it comes to holiday campaign planning, the time to act is now.
Every four years, the peak of holiday shopping happens to coincide with the US presidential election, as is the case in 2024. Although they operate outside the political sphere, marketers working on holiday campaigns must understand how political advertising for this year’s election cycle will impact the broader marketing landscape in order to plan effectively for their holiday campaigns.
This year, political ad spend is projected to reach between $10.2 billion and $12 billion, representing a potential increase of between 13% and 30% from the prior presidential election cycle. And, political ad spend data from Basis platform in 2022 and 2020 demonstrates that about 50% of the year’s political spending happens in the 30 days leading up to the election. Considering that this time period coincides with the holiday shopping season, and that Black Friday and Cyber Monday will happen just weeks after the election, advertising teams should anticipate CPMs to be exceptionally high during this time.
And what of election advertising’s potential impact on brand perception? Given how divisive political content and ads can be, the election season presents heightened brand safety risks, including the potential for ads to appear next to negative political content or alongside political disinformation or misinformation. Marketers working on holiday campaigns will need to up their placement control, especially in the month leading up to Election Day, to ensure their ads are shown in premium, non-divisive environments. To accomplish this, marketing teams can leverage allow lists and block lists, invest in premium content via programmatic guaranteed and PMPs, and may choose to avoid social platforms where divisive political conversations are likely to run rampant, such as X. Given the negative sentiments that often accompany political ads, teams working on holiday campaigns this year will be well-served to craft a strong brand safety plan now to avoid problems as Election Day draws near.
During the 2023 shopping season, the top sources for winter holiday purchase inspiration were suggestions from family and friends, online searches, and social media, according to the GWI x Basis ImpactIQ Research Panel. In 2024, 44% of shoppers feel that online tools, including AI tools, will be essential for them when getting organized for the winter holidays. The takeaway for marketers? Technology is playing an increasingly vital role in enhancing the shopping experience.
Given that many shoppers rely heavily on online resources and digital channels to get inspired and organized for the holiday season, omnichannel marketing with a focus on digital channels offers a prime opportunity to reach consumers in ways that complement their buying journeys. To that end, here are a few things to keep in mind:
With third-party cookie deprecation on the horizon (though, admittedly, further on said horizon than it was earlier this year), teams that proactively plan to capture, organize, and leverage customer first-party data this holiday season will set their campaigns up for success—and prevent scrambling when the 2025 holiday season rolls around.
By getting data collection and storage processes organized now, teams can avoid having to fix problems later, freeing up time and resources to make the most of the data they have collected. This might include optimizing a brand’s website for data intake, as well as ensuring a brand has effective systems and technology for standardizing, organizing, and storing that data.
This is also a great opportunity to leverage loyalty programs, newsletters, and other opt-in programs to collect customer data to create personalized advertising experiences. It’s a win-win for advertising teams and consumers, as it allows teams to deliver impactful campaigns and shoppers to save on their holiday expenditures.
Once advertisers are set up with efficient systems for collecting first-party data, they can find privacy-friendly and regulation-compliant ways to leverage it for personalized marketing. For example, advertisers can create targetable audiences with a CRM or CDP to sharpen their focus and to make their creative more relevant and effective. Advertisers can also take advantage of new AI-driven personalization and content generation tools—technologies that 72% of US digital retailers believe will significantly impact their businesses this year—to create personalized ads and shopping recommendations.
Though holiday celebrations may seem distant, the reality is that consumers are starting their shopping earlier and earlier. Deliberate planning now can help brand and agency leaders prepare their teams to adapt to consumers’ spending behaviors and preferences, cater to their budgetary concerns, adapt to the added complexity of the upcoming election, and craft winning campaigns that resonate with audiences and drive sales. And, by improving their systems for collecting and leveraging first-party data, leaders can ensure their teams are set up for success in 2024—and beyond.
—
Looking for more insights on how to make the most of the 2024 holiday advertising opportunity? In our new research report, we explore insights from a GWI x Basis ImpactIQ panel of 2,000 US consumers and unpack the key trends that will define holiday shopping this year.
The question of how to of build and maintain trust between agencies and their clients has been a topic of discussion for decades. Yet the strained alliance between agencies and brands seems to have grown even more tenuous of late, with nearly half of marketers saying their agency’s client relationships are more strained today than they were two years ago.
Considering the numerous challenges facing agencies today—from rising rates from media partners, reduced client budgets, and subsequently shrinking margins, to signal loss, to the talent crisis, to an increasingly fragmented media landscape—it’s not all that surprising to see these strains impacting relationships with clients.
“An agency CEO summed up the gravity of the situation for me recently,” says Michael Olson, EVP of Client Development at Basis Technologies. “He said, ‘The business of agencies right now is staying in business.’”
In the face of these myriad factors contributing to the strained relations between agencies and their clients, agency leaders should adopt practices to build trust with their clients—a worthy priority, given the impact trust has on the quality of agency/client relationships and on generating new business, with more than three-quarters of marketers finding their agencies through word of mouth.
To foster more trusting, fruitful, and longstanding partnerships with their clients, agencies must invest in developing and nurturing their client relationships, providing transparency whenever possible, and working to reduce siloes amongst their team.
In 2023, a whopping 55% of brands said that they were likely to end their relationship with their primary marketing agency in the next six months. In this fraught and competitive landscape, agencies must earn their clients’ trust by finding ways to invest in those relationships beyond the scope of work itself.
“Clients need their agency partners to deeply care about their businesses and fully understand how they operate,” says Kelly Boyle, Group VP of Client Strategy and Insights at Basis Technologies. To do so, agencies should allocate time for staying up to date on what’s happening with their clients’ businesses—for instance, reading their earnings reports and press releases—as well as keeping tabs on their clients’ competitors, so they can bring a heightened level of fluency and insight to their interactions. “Even something as small as knowing and using your client’s internal lingo can serve as a meaningful signal that you understand and are invested in their business,” says Boyle.
Like any relationship, communication is key: When asked in a 2023 survey how agencies can become better partners, the most common answer from brands was “communicate effectively.” To improve communication, agencies leaders might opt to set up regular, high-level leadership check-ins with their clients to touch base on the overall partnership. This gives leaders a chance to ask their clients how the partnership is faring from their point of view and whether the agency is meeting the clients’ needs, allowing them to better address any misalignments or areas of growth. This kind of regular, open communication creates an opportunity for clients to share high-level feedback, and it gives the agency the chance to respond and adjust accordingly—before the client opts to end the partnership. It also creates a prime opportunity to realign on clients’ needs and goals. “When there’s a breakdown in communication on desired outcomes and needs between an agency and their client,” says Olson, “that relationship is likely going to break.”
Overall, a little goes a long way in terms of nurturing client relationships. By finding small ways to go the extra mile in terms of understanding their clients’ businesses and fostering intentional communication, agencies can make significant headway towards building long-lasting trust with their clients.
The many challenges facing agencies today have resulted in reduced transparency, which can weigh down agency-client relationships. A lack of fee transparency, for example, is a rising point of contention that (while often viewed as “necessary” by agencies facing intense financial pressures and shrinking profit margins) can erode trust with clients.
Boyle points to overselling and underbidding as another common practice by agencies looking to win new business. Unfortunately, overselling when trying to lock in new business leads to a host of other issues that work to undermine client satisfaction, as agency workers must try to deliver on what was promised at a reduced rate, which can lead to understaffed accounts and employee burnout. This is likely a contributing factor for brand marketers who rank “dissatisfaction with value” as the number one reason they end agency relationships. Overselling can also create a breakdown in trust, as clients feel that agencies weren’t transparent about their capacity during the pitching process.
While financial pressures may drive agencies to be less transparent than their clients would prefer, agency leaders must find ways to meet brands’ expectations. For example, to reduce the negative impacts of overselling, agency leaders may look to foster more alignment between their teams who pitch clients and those who eventually serve those clients, which can ensure that pitches are as clear, honest, and genuine as possible.
Being transparent about your team’s limits is another way to set realistic expectations and develop stronger relationships. While agency leaders might fear that saying “no” to a request undermines their value, being honest about limits can actually serve to build trust. “Agencies want to say yes all the time to please their clients,” says Olson. “But when an agency says yes to something and then fails, that’s another strike against them for the client. My recommendation is to own what you do well, and don’t shy away from saying no to things that your team can’t deliver on.”
By demonstrating that they understand their clients’ need for transparency and that they are taking measures to meet that need, agency leaders can get in front of this common point of contention and foster more trusting partnerships.
Media complexity and fragmentation in the marketing landscape have led to agencies working with an increasing number of siloed data sets. More than half of agency workers’ tech stacks consist of six or more tools, which is likely why about 20% of agency leaders plan to increase their investment in data management tools within the next year.
When data sources are siloed, agencies lack a single source of truth—a disconnection which can lead to clients hearing different things from different people in the same agency, which serves to undermine trust. Data siloes also reduce data accuracy and can result in faulty data analysis.
Even more, data siloes bog agencies down with manual data consolidation, standardization, and verification tasks, which limit their speed and agility. As such, the lack of data consolidation at agencies is a contributing factor to why only 31% of marketers on the client side are satisfied with the speed and agility their agency partners bring to the table, despite 92% of those same marketers feeling that speed and agility are important. “Once everyone from account services to billing to media operations can operate off a clean data set, everything moves incredibly fast,” says Olson.
Investing in systems and tools that automate data consolidation has a host of benefits that strengthen agency-client relationships, even beyond building trust and increasing speed and agility. For example, the ability to access a single source of truth via unified data sets supports better marketing personalization for consumers and better satisfaction for agency employees, as it reduces the laborious manual data consolidation in which many agency workers get bogged down. It also gives agency workers more time to focus on strategic and creative tasks, which improves the quality of their work (and which tend to be far more satisfying than hunkering down with some spreadsheets.) All in all, because of the many ways it allows agencies to better serve their clients, reducing data siloes is one of the most impactful actions agency leaders can take to strengthen their client relationships.
At their core, long-lasting and fulfilling agency-client relationships are built on a solid foundation of trust. As agency leaders navigate the many challenges facing their businesses today, focusing on improving client trust via nurturing client relationships, offering transparency, and reducing data siloes will be critical for not only staying in business, but gaining a competitive advantage.
—
Want to find out how agency leaders across the US feel about the challenges and opportunities that are shaping their futures? Check out our 2024 Advertising Agency Report to get all the top takeaways from our survey of agency professionals.
If it seems like everyone around you has been getting the adventure itch lately, they’re in good company: More than 90% of Americans are planning to take a trip in 2024, with 50% intending to travel more this year than they did last year.
While concerns over inflation linger, with 54% of Americans reporting that the economy is impacting their travel plans, more than half still have ranked travel as a budget priority for 2024. And with "relaxing and recharging” ranking as the number one reason Americans want to travel this year, it seems that a good portion of consumers value the opportunity to unwind enough to feel that travel is worth the splurge, despite inflationary concerns.
Airlines, hotels, and other travel businesses looking to connect with these budget-conscious, relaxation-seeking consumers face new and unique challenges, from shifting consumer habits to rapidly evolving technologies. To set their teams up for success and make the most of the opportunities available to them in 2024, marketing leaders will need to understand these challenges and implement fresh strategies to address them proactively.
Inflation has been a constant thorn in consumers’ and marketers’ sides in recent years, with consumer price inflation increasing by a whopping 19.32% between January 2020 and April 2024. Many consumers are adjusting accordingly and have begun dedicating more of their budgets to travel: Where only 24% of Americans planned to set aside $4,000+ for travel in 2023, that number has risen to 52% in 2024.
Still, price is still top of mind for many consumers—15% have cancelled or postponed a trip in 2024 due to the cost of travel—and travel marketers would do well to factor that into their advertising messaging, emphasizing discounts, low rates and bundles while highlighting value for price-conscious consumers.
Loyalty programs should also be front-and center, as 50% of US consumers in 2023 were airline travel rewards members, and 49% were hotel travel rewards members, according to a panel done by Basis Technologies in partnership with GWI. By crafting ads that highlight value and low rates, travel marketers can speak directly to the factors that are most relevant to consumers.
The initial years of the pandemic brought about many shifts in consumer behavior that are still with us today, including (but certainly not limited to): An explosion of remote work, a renewed focus on health and sustainability, increased digital engagement, and a heightened sense of budget-consciousness. All these factors are now driving new audience segments and travel trends.
For example, the rising number of people who now work from home has helped spur the formation of a new audience segment: “bleisure travelers,” or people who travel for a combination of business and leisure. At the same time, solo travel has increased by 42% among US consumers since before the COVID-19 pandemic, according Basis/GWI research. And, surprise trips are gaining ground amongst US consumers this year, with 52% of travelers interested in taking a vacation where the location and all the accompanying details are a surprise until departure.
Each of these audiences display unique characteristics and behaviors that advertisers can use to connect with them more effectively, and travel marketers who want to reach them should adjust their tactics accordingly. This could be by leveraging a customer relationship management (CRM) platform to collect, organize, and research customer data; using machine learning technology to analyze first-party data and identify patterns, trends, and other insights; or investing in a researcher (or team of researchers) to organize and dig into existing data so it can be used effectively. Regardless of which method(s) they use, advertisers must consider the unique wants and needs of these new and emerging groups and adapt their campaigns to meet those needs.
Which leads us to our next challenge…
While personalization in digital marketing has become a must-have for all industries, it’s particularly impactful for travel and tourism brands. In fact, 86% of travelers say they’re looking for personalization during their travel experiences and interactions. And personalization isn’t just a trend on the marketing side—businesses are leaning into it to improve product and service experiences as well.
Delta Airlines, for instance, uses personalization technology to deliver personalized in-flight entertainment, onboard amenities, and more to customers. Hilton also leverages customer data—specifically, data obtained through their Hilton Honors loyalty program—to provide a more intimate and individualized customer experience.
Marketers should personalize the experiences they curate for consumers to complement personalization on the product and services side. For example, a hotel brand might craft one variation of ad creative that emphasizes amenities that would appeal to families, and another that’s geared toward solo travelers. Or, a tourism company that offers immersive local experiences might target audiences 21+ with creative that features alcoholic beverages.
Capturing audience information and leveraging it, however, are two different things entirely. Marketing teams need systems to both collect this data and connect it to their CRM platforms to create personalized advertising experiences. The challenge? Many marketing teams today use a variety of point solutions to navigate the complexity of the digital media landscape. And, as a result, many travel marketing teams struggle with poor data quality and a lack of data consolidation.
There are a variety of ways to address this, from upping your team’s number of data analysts to investing in tech like customer data platforms (CDPs) and universal reporting systems. Marketing teams with robust and secure systems for gathering, storing, and making the most of customer data will be well-positioned to create meaningful and personalized campaigns—especially looking ahead to the cookieless future.
While it might be tempting to imagine that Google will continue to delay the loss of third-party cookies in Chrome in perpetuity, the cookiepocalypse will inevitably arrive, and it will do so in the not-too-distant future. According to Google’s latest announcement, the tech giant’s current goal is to begin cookie deprecation in early 2025. If all goes according to plan (which, granted, is a pretty big “if”), that means travel brands and agencies only have about six months to get their ducks in a row before losing the targeting and attribution enabled by third-party cookies. As such, it’s critical that travel brands and agencies proactively strengthen their team members’ fluency with cookieless targeting and attribution this year in order to set their businesses up for success once third-party cookies are gone for good.
In terms of cookieless advertising solutions, activating first-party data should be a top priority, as most travel brands have the ability to collect large amounts of first-party data from customers and prospective customers through their interactions on brands’ websites and social media pages. However, that data is often siloed across many different third-party vendors, preventing advertisers from leveraging it to its full extent. As such, travel brands must adopt systems like CDPs—which can collect first-party data from many different sources, process and standardize it, and perform real-time segmentation for targeting—to unify their first-party data and use it for cookieless targeting and attribution. CDPs can also empower advertisers to map out their consumers’ buying journeys to assist with attribution.
Contextual advertising will also be an essential targeting solution for travel advertisers in a cookieless world. Given that the majority of US consumers use digital resources to research their trip accommodations before booking, there’s a big opportunity for travel brands of all kinds to connect with consumers in ideal moments as they plan their vacations.
To better connect with their target audiences throughout their customer journey, travel marketers need to keep a pulse on shifts in consumer behavior. By first identifying key shifts in consumer behavior, travel brands can ensure that audiences are seeing the right messages at the right time.
What might this look like in practice? Well, a brand who wants to earn solo travelers’ dollars might focus on streaming video ads to build awareness of their products and services, since these travelers often watch online videos to occupy their down time on their solo travels. Teams could then retarget these prospective travelers via paid search or native ads as they move from awareness towards consideration and purchasing.
Or, a travel agency working with a brand that wants to reach road trippers might focus on connected TV (CTV) and other digital video channels during early stages of the customer journey, as well as roadside digital out-of-home (DOOH) billboards, since these travelers watch a lot of online videos and spend a significant amount of time on the road. With retargeting, advertising teams can then place additional, personalized ads across digital channels like audio (for the drivers listening to their favorite music and podcasts) and social media (for the passengers posting photo dumps of their travels) to move these customers further down the funnel. By both leaning into current consumer trends and thinking holistically about their path to purchase, travel brands can make meaningful connections with travelers throughout their individual journeys.
For travel marketers to ensure great experiences for their target audiences and consumers, it’s critical that they embrace the latest technological innovations. And the last couple of years have seen particularly rapid advances in this area, as generative AI has become more popular with consumers and advertisers alike.
First and foremost, travel companies need to ensure their customer-facing technology ensures a great experience, as consumers’ path to purchase is increasingly digital. As noted previously, most US consumers use digital resources to research their trip accommodations before booking, with more and more younger consumers in particular using generative AI tools to assist in their travel planning. And consumers are increasingly reserving their travel digitally, which is driving a growth in digital sales. Data from Vivvix and Pathmatics show that the travel brands who spend the most on advertising are also the top digital advertising spenders, indicating that top brands are tailoring their strategies in response to the rising preference for digital.
For brands, perfecting a digital presence will help with both garnering new customers and retaining existing ones. At the very least, a brand’s digital presence must ensure a good customer experience: When prospective customers see an ad for a company but encounter overly-complex or faulty tech when they click on it (i.e., their click brings them to a “page not found” error on the company’s website or to a hard-to-navigate app), that experience can have negative impacts on conversions, not to mention customer loyalty.
Additionally, travel marketers should take advantage of newer technology-driven tactics to maintain a competitive edge. One prominent example of a technology-enabled tactic that travel advertisers can embrace is dynamic pricing. Advertisers working for airlines and hotels can use factors such as time of year, day of the week, and corporate versus leisure travelers to estimate the right price point to drive conversions. Using technology backed by artificial intelligence, it’s possible to make these adjustments based on daily changes in market demand. Some pricing engines have the power to update fares as often as every 15 seconds, and businesses are starting to see the huge difference this makes in bookings.
Though this new technology-driven strategy can result in significant benefits for travel advertisers, it can also present distinct challenges. To use dynamic pricing requires much more than just investing in the tech: Marketing teams must also rework their data management processes, including integrating CRM and revenue analytics. This can be made even more difficult if customer data is messy or has not been consolidated to a single interface—another reason why it’s so important for travel and tourism advertisers to prioritize data quality and tech stack consolidation.
More and more travelers are looking for environmentally sustainable travel options, with 80% of travelers worldwide agreeing that sustainable travel is important. And while it’s true that marketing teams may not have much say in their company’s larger sustainability initiatives, there are ways they can prioritize the environment through their advertising practices.
First and foremost, marketing teams should avoid greenwashing at all costs. Making sustainability claims that a brand can’t back up is inauthentic and diminishes consumer trust. And, these damages often extend beyond tarnishing a brand’s reputation: Making false or misleading claims can negatively impact customers’ experiences with the products or services they provide.
Additionally, there are strategies that digital advertising teams can use to help minimize their carbon footprint. One such strategy is to prioritize capturing audience attention over serving as many impressions as possible—especially since anywhere from 30% to 40% of online ads are “not ultimately viewed by consumers.” Another is by streamlining internal processes to reduce the amount of computing power needed for a typical campaign workflow. Rather than using many point solutions, consolidating to a single, automated platform for every step of the campaign can help advertising teams further minimize their environmental impact.
By leaning into sustainability, even in ways that may not be immediately apparent to consumers, travel and tourism brands can back up authentic statements about their commitment to the environment—and in doing so, match their consumers’ values.
All in all, one of the most important factors in marketing teams’ success this year will be how well they understand their consumers’ behaviors, values, and expectations.
To meet the needs of these travelers, marketing teams must be flexible and intentional, consider the entire customer journey, lean into personalization, emphasize their value in an authentic way, and adapt to innovations in technology. It’s a lot to consider, but hey—so is making all the arrangements for a memorable getaway!
—
Agency marketers working in the travel industry are adapting not only to shifting consumer behavior, but also to massive changes taking place in the advertising industry and in the agency world specifically. Curious as to how your agency peers feel about their jobs, their agencies, their industry, and the challenges and opportunities that are shaping their futures? Check out our 2024 Advertising Agency Report to find out.
Purpose-driven marketing appears to have hit a crossroads. While the 2010s and early 2020s saw a rise in brands taking bold stands to advocate for social and environmental causes, many advertisers have grown more cautious in the past year—particularly in light of the Bud Light boycott and the Target Pride month merchandise backlash. These events seem to have advertisers wondering: Do brands have a place in social and environmental advocacy? And is there any way to get it right?
In the case of Bud Light, the brand partnered with influencer Dylan Mulvaney, a transgender woman, and was the subject of a boycott by conservative Americans who were unhappy that Bud Light was indicating support for transgender rights. In the case of Target, the brand drew backlash relating to its Pride-related merchandise—some of which was based on misinformation spread via social media—and consequently withdrew some of that merchandise from certain stores and from their website. Both brands then garnered further backlash from prominent LGBTQIA+ advocacy groups and consumers who felt the brands’ responses represented a failure to maintain support for their community.
Now, in the wake of those incidents and their ensuing fallout, many brands are reevaluating whether taking a social or environmental stand is worth the risk. In assessing whether purpose-driven marketing makes sense for their organizations—and, if so, how to execute it effectively—marketing leaders must determine whether they are running these campaigns for the right reasons and honestly assess whether the values they’re touting are truly fundamental to their brands or just a convenient marketing opportunity. To do so, they must not only look inward, but understand the history of social and environmental advocacy in advertising, how consumers feel about it today, and what successful purpose-driven marketing looks like.
Over the past decade, conscious consumerism has grown more mainstream as more and more consumers have embraced the idea of “voting with their dollars,” or purchasing from brands whose values align with their own. While the idea of dollar voting has been around for a while, the rise of the internet accelerated its adoption, as consumers grew fluent in using the web to research brands and circulate information about their activities.
And it’s not just consumers who have driven this shift—employees increasingly want to work for businesses who uphold social and environmental values. Over half of US workers say they would leave their current job for an employer who has a more positive impact on the world, including 71% of employees age 18-to-29 and 62% of those age 30-to-44.
These shifts are likely influenced by the fact that consumers are growing more diverse across multiple axes: Racial and ethnic diversity is increasing amongst the US population, and the percentage of US adults who self-identify as LGBTQ+ has more than doubled since 2012, including one in five Gen Z adults. As our society grows more diverse, there’s been rising demand for brands to not only represent that diversity in their marketing, but to authentically demonstrate their inclusion and support for different communities (particularly historically marginalized communities) as well.
Accordingly, more brands began to take social stands in their advertising. Nike made Colin Kaepernick, the former NFL quarterback who kneeled during the national anthem at his games to protest racial injustice and police brutality, the face of its “Just Do It” 30th anniversary campaign. Gillette’s “The Best Men Can Be” campaign took on toxic masculinity in conversation with the #MeToo movement. And numerous brands—including MAC Cosmetics, The North Face, and Levi’s—have run Pride campaigns supporting LGBTQIA+ causes during June each year.
But this kind of purpose-driven marketing can be a risky undertaking, as many social and environmental causes are politicized, and “taking a side” can mean running the risk of alienating a significant fraction of the public, especially in places like the US where political polarization is high. At the same time, consumers are quick to criticize brands who try to capitalize on the attention given to social and environmental issues in inauthentic ways.
As such, understanding when, why, and how to take a stand on social and environmental issues is a skill set that’s increasingly important for modern marketers. Today’s consumer base has high expectations around authenticity, and it takes work to build the trust, connection, and loyalty that brands covet—while, of course, avoiding the negative impacts of potential backlash. And although getting purpose-driven marketing right might seem like a daunting task, it’s simpler than advertisers might expect: Essentially, it comes down to knowing a brand’s values, and ensuring that brand is authentically living out these values before addressing a related social or environmental issue in your messaging.
Despite trends in conscious consumerism, employee preference for socially responsible employers, and growing demographic diversity, consumer sentiments around purpose-driven marketing aren’t unanimously positive. In a 2023 survey, 53% of respondents reported feeling that corporations should not engage with political or cultural issues. And, researchers have found that when brands promote controversial messages, their advertising outcomes suffer, even for brands who are well known for their activism. At the same time, social and environmental causes don’t trump other factors in consumers’ purchase decisions: Quality, price, and convenience are the most important factors influencing US consumers’ purchases. Considering these factors, some brands may reasonably decide that purpose-driven advertising isn’t right for them.
However, the consumer base of tomorrow may lean more towards favoring brands who take social stands. Millennials and Gen Z, who will soon claim the majority of buying power in the US, are more likely to be socially conscious purchasers and 27% more likely than older generations to buy from a brand that they believe cares about its social and environmental impact. They also understand their purchasing power more than older generations, which makes them more likely to engage in conscious consumerism. As a result, brands looking to engage younger audiences may want to consider purpose-driven marketing to show these consumers that they share their values.
Of course, meeting consumer sentiments and expectations isn’t the only reason brands adopt purpose-based marketing. Advertisers have the power to shape and define culture with the messages and representations they put out into the world, and I believe that power comes with great responsibility. When advertisements only feature actors and models who look a certain way, for example, that indirectly signals to consumers who look differently that they don’t belong. There’s a wealth of research highlighting how unrealistic beauty standards in advertising impact the mental health of girls and women: One study found that exposure to Instagram ads featuring thin or curvy women influence late-adolescent girls' views of their bodies, potentially increasing their willingness to take drastic actions to alter their appearance. I think more and more advertisers are understanding their impact and growing more thoughtful about their messaging as a result, and that’s another reason why brands are increasingly taking social and environmental stands with the goal of having a positive impact on our society.
With the rise in socially conscious consumers and socially conscious advertising, however, has also come a spike in brands who try “talk the talk” without also “walking the walk,” hoping to reap the benefits of purpose-based marketing without having to demonstrate a genuine commitment to those values. For example, a brand might run a Black History Month-themed campaign to capitalize on the attention given to the Black community during February, despite not having a racially diverse employee or vendor base and/or while their Black employees don’t feel supported.
This type of marketing has grown into such a problem that there are specific terms for brands trying to inauthentically capitalize on the attention being given to certain social causes, such as “greenwashing,” “rainbow-washing,” and “woke-washing.” And consumers, regulators, and organizations alike are increasingly cracking down on this behavior.
Brands get called out on social media every year for inauthentically tapping into social causes—for example, the Gender Pay Gap Bot on X highlights corporations’ International Women’s Day messages alongside their internal gender pay gaps to expose their inauthenticity. In Europe, regulators are introducing and enforcing legislation that makes greenwashing a legally punishable offense. And Pride in London, the nonprofit that organizes one of the UK’s biggest LGBTQ+ Pride festivals, is asking that advertisers who want to participate in this year’s festival engage with LGBTQIA+ causes throughout the year and promote LGBTQIA+ inclusion within their organizations.
All in all, inauthenticity when taking social stands can lead to consumer backlash and negative brand perception, and it is one of the main traps brands fall into when trying to embrace socially conscious advertising. In contrast, brands can find success in supporting social causes when they do so authentically and as part of a long-term strategy.
My biggest recommendation for brands looking to embrace social and environmental causes in their advertising is this: Make sure whatever cause you’re looking to advocate for is one that your organization actively and genuinely supports before you share that advocacy externally. For example, if a brand wants to run a campaign during Earth Month related to their commitment to sustainability, they need to start with an internal audit. What’s the environmental impact of how their products are made? Do they regularly donate to and partner with environmental causes and organizations? Do their employees feel that their brand authentically acts out a commitment to the environment? If so, that brand is well-positioned to leverage their strategists and creatives to create a sustainability-focused marketing campaign.
Brands also need to understand that taking a stand on a social issue may result in backlash, and they should have a plan for if and how they’ll respond if that happens. Target’s response to the backlash it received last year is, unfortunately, a good example of what not to do. In reducing its Pride-related merchandise in response to criticism, the brand received even more criticism from consumers who felt it had walked back its support of the LGBTQIA+ community. Panelists discussing LGBTQ brand advocacy at SXSW this year agreed that in the end, the situation only grew more toxic for Target when they engaged in that initial backlash by walking back their stance.
Due to the political polarization around many social issues, there’s a good chance that brands will receive backlash when they take social stands. This is why leaders need to plan for if and how they’ll respond to criticism. Ideally, social and environmental stands should be one part of a brand’s authentic, long-term engagement with a community or issue. When brands are deeply committed to their values, they accept the fact that not everyone will be aligned with those values. Organizations that understand this, and that are prepared to hold true to their values in the face of criticism and disagreement, will be best positioned to run a successful purpose-driven campaign without wavering under pressure and suffering any subsequent erosion of trust with its core audience for doing so.
Ultimately, the keys to taking a social stand effectively are to do so as part of a long-term strategy that includes both internal and external action, reflects a deep understanding of a brand’s values and of their audience’s values, and that doesn’t waver amidst criticism.
While purpose-driven marketing is by no means right for all brands, it’s something marketing leaders will want to consider as younger, socially conscious generations inherit the majority share of consumer buying power in the coming years. Agency leaders, in particular, will need to train their teams on how marketers can advocate for social and environmental causes in effective ways in their advertising, so that they’re prepared when their clients inevitably show interest in doing so.
At the end of the day, while the nuts and bolts of purpose-driven campaigns can be tricky to iron out, the recipe for success is fairly simple: Brands should take social stands only as part of authentic, longstanding commitments to those causes, which are reflected both inside and outside their organizations.
Derek Zolner is Basis Technologies’ General Counsel. Here, he offers insights into the draft APRA legislation and its potential impact on digital advertising.
Since its introduction in early April, the American Privacy Rights Act (APRA) has generated significant buzz due to its potential implications for the digital advertising industry in the United States. This proposed federal legislation aims to establish the first generally applicable national data privacy framework and represents Congress’ best chance yet to pass such a law, given that it appears to have both bicameral and bipartisan support.
It’s unclear, however, whether this legislation will escape the congressional purgatory where previous attempts at a federal data privacy framework have stalled. And the fact that it is moving through the legislative process during an election year could either help or hinder its progress, depending on how it aligns with key players’ legislative priorities.
Despite these uncertainties, the bill’s initial hearing in front of the House Energy and Commerce Committee garnered significant praise from witnesses and members of the Committee on both sides of the aisle. And the bill’s sponsors have described this draft legislation as “the best opportunity we’ve had in decades to establish a national data privacy and security standard.”
Given its potential to change both how digital advertising teams collect and utilize data and how audiences can control their personal data, it’s worth unpacking the APRA in its current form and examining its potential wider impacts on the digital advertising industry.
The APRA has the potential to truly change the landscape of data privacy in the US, as it would represent the first federal, comprehensive privacy act. Though there are currently sector-specific privacy laws, such as HIPAA for the healthcare industry and the Gramm-Leach-Bliley Act (GLBA) in financial services, the US has yet to enact a national data privacy framework that would be applicable to most businesses. Digital advertisers today are left navigating these sector-specific laws, alongside a varying patchwork of state-level data privacy laws.
The APRA would change that, establishing federal guidelines for how consumers’ personal online data can be collected and used, as well as what actions consumers can take when their data is misused. Much of the draft legislation mirrors what we currently see in state-level laws, such as the CCPA, which allow consumers to ask companies what personal information they have about them and how they are using it. These state laws also give consumers the right to correct that data, to delete it, or to opt out of its use in certain ways. The APRA includes similar consumer access and data rights provisions.
Unlike state laws such as the CCPA, which only permit private lawsuits in case of data breaches or provide no private right of action at all, the APRA would allow individuals to sue for any violation of the act. For instance, if a company fails to honor a California consumer’s personal data access request, that consumer cannot sue the company for its failure to do so. If the APRA was passed in its current form, however, that consumer would be able to pursue direct legal action against the company. As such, this inclusion of a private right of action for any violation of the APRA represents a significant and potentially costly shift, as it expands the range of circumstances in which individuals can pursue legal action against companies.
Beyond these consumer access and rights features, the APRA has an added focus on large social media companies and companies that process large volumes of personal data. Tech behemoths such as Meta and Google would fall into this category, as well as many adtech companies that have DSPs, SSPs, and DMPs, all of which handle substantial amounts of personal data for ad targeting and optimization.
This section of the APRA is a novel feature, not previously seen in state laws or even comprehensive laws in other jurisdictions, like the GDPR. It outlines very specific and expanded data security and reporting requirements that address these companies’ data handling practices. These requirements include designating a data privacy officer and chief data security officer as well as new annual reporting obligations.
Another notable feature of the APRA is its inclusion of a preemption provision, meaning that the APRA would preempt state laws that cover the same subject matter.
This is something that digital advertisers have long wanted: Instead of legal, data security, and privacy teams having 50 different state law compliance targets, the APRA would provide one comprehensive, standard law that would preempt any similar state laws. At the same time, its expanded scope would present a new compliance challenge in instances when the APRA would be stricter than the standards set by existing state-level laws. This would add an additional layer of complexity for digital advertisers who would have to adjust their practices to meet these new requirements.
What, then, could the APRA mean for digital advertisers?
While advertisers have speculated about the possibility of the bill banning targeted advertising in the US, a more probable scenario is the implementation of an express or implicit requirement for user opt-in regarding cross-site tracking and targeting. Currently, when a user visits a website and encounters a cookie consent banner, opting out often requires several steps. The APRA could simplify this process by requiring a banner with clear options like “accept all” or “reject all.”
In fact, technological barriers—such as browsers deprecating third-party cookies—play an as big or bigger part in the future of targeted advertising. Even if users are allowed to opt-in under the APRA, if browsers are already blocking third-party cookies, then the “accept all” choice would be meaningless, because cookies aren’t supported.
So, while advertisers likely don’t have to worry about the APRA banning targeted advertising, the looming loss of cookies in Chrome remains. This means that advertising leaders should be exploring and embracing cookieless solutions, regardless of the outcome of this legislation.
Apart from the impact on cookies, adtech companies would also face increased data security and reporting requirements that would come into effect under the APRA, particularly for companies that would need to meet the obligations outlined for large data handlers. Beyond having to hire for new positions related to data security and privacy, these teams would also face a new compliance layer, including significant reporting requirements. And like with GDPR, the APRA would require a host of new contracts or amendments with customers, partners, and vendors.
As with all new regulation, this will be a boon for lawyers and other professional advisors at a significant cost to companies trying to comply. Companies would need a meaningful opt out mechanism and a solid process for allowing people to make data subject access requests. Teams would also have to prepare for more of these requests, since people in all 50 states—not just those with enacted privacy laws—would be able to make such requests.
In addition to representing what might be Congress’ most viable attempt yet at establishing a federal data privacy framework, the APRA’s development underscores the pressing need for industry-wide adaptation to an evolving regulatory landscape. While its fate remains uncertain, the potential implications of the APRA are undeniable and represent a pivotal opportunity for those in the digital advertising industry to embrace a privacy-centric approach to connecting with audiences.
__
Want deeper insights into how your peers feel about privacy and user data, specifically within the context of signal loss? Learn how advertisers are navigating third-party cookie deprecation, data privacy, and more in our report, Identity vs. Privacy: Digital Advertising in a Cookieless World.
In today’s era of rapid technological innovation, it can be easy for marketing leaders to focus solely on building a top-notch adtech and martech stack as the ultimate way to empower their team. After all, tech is undeniably a critical and transformational piece of any marketing team’s effectiveness.
But a successful marketing team takes more than tech alone. To build and retain a team that reaches its full potential, marketing leaders must also prioritize the “soft skills” that empower effective collaboration and champion the kind of creative risk-taking that sets teams apart.
These human elements are especially relevant in the context of declining employee engagement, which after rising steadily throughout the 2010s has remained fairly stagnant since the early days of the pandemic. As of 2023, only 33% of US employees were engaged in their work and workplace, with unengaged workers representing $1.9 trillion in lost productivity on a national scale.
In this environment, finding and retaining talent is a top concern for C-suite executives. This is particularly true for marketing organizations, which lost 14% of their workforce between 2019 and 2022 and continue to grapple with an ongoing talent crunch. In fact, global marketers ranked talent management as one of their top five challenges in 2023.
As the CMO of an organization whose core ideology includes a dedication to the personal and professional growth of each employee, I’ve found that the way my team works together is one of the biggest predictors of our success. If our culture isn’t healthy, productive, and collaborative, the quality of what we produce suffers.
Similarly, as marketing leaders contend with major paradigm shifts in the industry, nurturing their team members’ social and emotional skills in service of the collaborative, innovative culture they foster will be a major differentiator for brands and agencies looking to retain top talent, advance innovation, and drive revenue.
Adopting a conscious leadership approach, which aims to build teams that work together as efficiently and as effectively as possible, is one of the most impactful things I’ve done in my tenure as a CMO (and I don’t just mean embodying conscious leadership principals myself, but making sure my team members are trained in embodying those principles as well). It can be easy to discount the so-called “soft skills” this kind of leadership focuses on—things like self-awareness, empathy, accountability, emotional intelligence, and curiosity—but these are the skills that give teams the cohesion and adaptability necessary to meet all the changes taking place in the advertising landscape. At the same time, building a team with these skills means creating a team culture that is positive, supportive, and fun: In other words, a culture that engages team members and makes them want to stay for the long haul.
Research highlights the benefits of both leaders and team members having these skills: Leaders with strong emotional self-awareness are more likely to be perceived by their teams as creating environments that foster high performance, and the World Economic Forum has noted that “decades of research now point to emotional intelligence as the critical factor that sets star performers apart from the rest of the pack.” In kind, businesses are increasingly seeking leaders with social skills like empathy, self-awareness, effective listening and communication, and the ability to work with many different kinds of people. Similarly, the demand for social and emotional skills in the US workforce is forecast to increase by 26% between 2016 and 2030.
These skills are even more relevant in the context of marketing, where the ability to empathize with a target audience in service of understanding what messages might resonate most with them can make or break a campaign. As such, these social and emotional skills drive innovation and creativity on marketing teams, and boost revenue in kind.
To embody conscious leadership, leaders must develop skills like the ability to give feedback without blame or judgment and to receive feedback with openness and curiosity, and foster those skills in their team members as well. Those things don’t just happen naturally—we all tend to judge others harshly, to get defensive, and to take things personally when our ideas or performance are criticized. It takes a significant amount of personal development work to gain a tolerance for giving and receiving feedback in constructive ways. When an entire team gains that tolerance, it leads to a level of cohesion and trust that can be transformative for the team’s output.
Another conscious leadership skill is the ability to remain open to the opposite of your own perspective being true. As with giving and receiving feedback, this skill requires a lot of self-reflection. You have to ask yourself, “Am I holding onto this idea because I know it’s the best way forward, or because I’m attached to not being wrong?” This is an especially important skill for marketers, because the work we create is very visible, and thus very open to feedback and criticism.
The self-reflection necessary for conscious leadership is uncomfortable, difficult work, and it takes real time and effort to implement across a team. Leaders must lead by example, of course, but also offer their team professional development opportunities to grow these social and emotional skills, as well as make a practice of digging into situations where team members aren’t working well together. At Basis Technologies, our leadership team spends a significant amount of time meeting together to practice these skills in real-time. We know that if we’re not working those muscles, it’s easy to revert to our bad habits, like gossip and blame—and in doing so, we create a culture of gossip and blame that will be felt and adopted by our teams.
One of the goals of a conscious leadership approach is to create a culture of psychological safety in service of boosting creativity and innovation—one in which individuals feel secure enough to share ideas, take risks, and be vulnerable with their team members.
A psychologically safe environment has a host of benefits for businesses. Research indicates that psychological safety drives improved performance and employee retention, and is one of the most reliable indicators of team performance, productivity, quality, safety, creativity, and innovation. Psychological safety has also been called the “key to realizing the promise of diversity in teams”. All of these benefits are even more apparent in teams whose work is creative and collaborative, like marketing.
Alas, psychological safety is all too often underprioritized, with one survey of workers across industries finding that “only a handful” of business leaders create climates of psychological safety among their teams. As such, adopting conscious leadership in service of creating psychological safety and fostering engagement can give marketing leaders a significant competitive edge.
Even more, psychological safety creates environments in which team members can take risks. Risk-taking is critical for us as marketers, because it creates stand-out ideas—and Don Draper had a point when he said, “Success is related to standing out, not fitting in.” Marketers can’t come up with the kind of risky, stand-out ideas that really make a splash if they don’t feel safe sharing those ideas with their peers. At the same time, in my experience, when we take more risks, we have more fun. Risk-tasking creates a more exciting environment to work in, and those are the environments where marketers stay engaged and want to stay for the long-term.
I don’t have everything figured out, and I am still learning about the best ways to foster psychological safety amongst my team. But I’ve made it a priority because of the significant benefits it offers in terms of talent retention, innovation, and creativity.
All in all, the term “soft skills” drastically underrepresents the power social and emotional skills offer marketing leaders and their teams. In truth, things like empathy, emotional intelligence, and conscious communication form the foundation of a high performing team.
As advertisers grapple with a huge amount of industry turbulence, conscious leadership offers a reliable avenue for leaders to retain talent, harness innovation, and drive revenue. Even more, leaders who embody these skills—and who help their team members to develop them in kind—create cultures of psychological safety that lead to the kind of creative risk-taking that sets brands apart.
From an increasingly complex media landscape, to the Great Resignation and an ongoing talent crunch, to prolonged economic uncertainty, to signal loss and heightened regulatory action, advertising agency leaders have faced a myriad of challenges that have impacted their operations, strategic planning, and financial profitability over the past several years.
Beneath the surface of these more visible challenges, a quieter yet equally significant issue plagues agencies: inefficiency. In fact, in a recent survey of agency professionals, respondents identified inefficient processes as the biggest challenge facing their agency today. These processes show up in a variety of critical areas, spanning project management, communication methods, resource allocation, client management, technology utilization, workflow processes, and more, and add an additional layer of complexity to the challenges advertisers are already navigating.
Not only do inefficient processes drain valuable time and resources, but they also hinder agencies’ ability to deliver high-quality campaigns promptly. When teams are burdened with inefficiency, it can create a ripple effect that damages client relationships, leads to employee burnout and turnover, and ultimately impacts an agency’s bottom line. As such, assessing and improving process efficiency is crucial for agency leaders who want to remain competitive, adapt to rapid industry changes, and ensure sustainable growth.
High turnover rates have long been a challenge for advertising agencies, with recent years seeing an outsized impact on junior-level employees. Though many factors impact employee turnover, inefficient processes can be a significant driver—particularly at a time when agency professionals already feel as though their jobs are harder than they were in the past.
Amidst these pressures, inefficiency can severely affect wellbeing and job satisfaction. Inefficient, duplicative workflows exacerbate stress, leading to frustration as employees spend excessive time on repetitive, low-value tasks. This also leaves less time for mentorship and meaningful collaboration, both of which are critical for engaging and retaining younger generations of talent. Frustration from inefficiency often culminates in burnout and/or disengagement, as workers feel overburdened by obstacles that impede their productivity and hinder their ability to deliver high-quality work.
For agencies that are already navigating talent retention woes, inefficiency can further exacerbate them: As skilled professionals become disillusioned with the lack of progress and innovation within their team, they might become more likely to seek opportunities elsewhere. And, the resulting high turnover rates not only disrupt team dynamics but also incur significant costs in terms of recruitment, training, and lost expertise. Research has found that employee disengagement and attrition could cost a median-size S&P 500 company $228 million per year—or more.
Addressing inefficiency is therefore crucial for building a positive workforce culture and preventing turnover and burnout—particularly as many agencies strive to accomplish more with fewer resources. By carefully evaluating processes and looking for ways to streamline operations, agencies can significantly improve both productivity and job satisfaction.
Specifically, leaders might consider using employee surveys and/or an internal efficiency audit to gauge how existing processes are working—or not working—within their agencies. For instance, if team members are overwhelmed by repetitive tasks, AI tools could help optimize workflows and free up employees to focus on more strategic, creative, and high-value projects. Such tools not only enhance collaboration but also allow for a more dynamic and responsive work environment, in which agency professionals feel empowered and fulfilled by their work. Or, if employees are making errors due to using too many different communication channels, leaders might consider unifying those efforts into a single platform to minimize errors and allow their teams to focus their energy on more creative, fulfilling tasks. By leveraging employee insights to identify ineffective processes, leaders can ensure they’re prioritizing the efficiency improvements that will have the greatest impact on their teams’ work and wellbeing.
Beyond impacting agency workforces, efficiency—or lack thereof—shapes client relationships. Nearly half of agency professionals say client relationships are more strained today than they were two years ago, and that sentiment is even more pronounced among those who feel that digital advertising has grown more difficult over that same time period.
When agencies struggle with inefficient processes, project timelines can become unpredictable, leading to missed deadlines and delayed campaign launches. Clients rely on timely delivery to meet their marketing goals, and any delay can disrupt their strategic plans, resulting in frustration and dissatisfaction. Additionally, inefficiency can lead to inconsistent communication and coordination, eroding trust and weakening the client-agency relationship over time.
Inefficiency can also compromise the quality of the work produced. When teams are bogged down by redundant tasks, they have less time to focus on creativity and innovation. The resulting campaigns may lack the strategic insight and originality that clients expect, ultimately affecting their brand’s performance in the market. As agency leaders look to minimize inefficiency among their teams to improve client relationships, tools like advertising automation software can prove particularly useful: By breaking down siloes and integrating all advertising activities in one place, leaders can ensure better coordination, communication, and execution across their teams.
Inefficiency can also significantly impact agencies’ bottom lines by draining resources and reducing overall profitability. For instance, consider an advertising agency tackling multiple high priority client campaigns during a particularly busy period. Due to outdated project management processes, employees spend excessive time completing manual data entry, communicating with clients over a variety of disparate channels, and navigating repetitive approval processes. Instead of using a unified platform, the team relies on multiple spreadsheets and email chains to track project progress, leading to confusion and errors. This disorganization requires employees to work overtime to meet deadlines, resulting in higher labor costs. And when working overtime to manage inefficiency becomes the norm, high rates of burnout and turnover are sure to follow.
Even more, despite those additional hours worked, the quality of the output does not improve—that extra time is spent on managing chaos rather than enhancing creativity or delving more deeply into strategic planning. The campaigns delivered likely lack the innovative edge expected by clients and fail to capture audience attention in today’s competitive digital environment. This can lead to the agency’s profitability suffering as they pay more wages without seeing an improvement in deliverables, suffer from strained client relationships, and face the potential of lost business as a result of this strain.
To address these inefficiencies, this agency might opt to centralize their task management, workflow, communication, and collaboration into one unified platform, reducing their reliance on spreadsheets and email chains. Additionally, they could use AI tools to help with the low-level tasks that currently monopolize their employees’ time, freeing them up to focus on more fulfilling, creative work.
Addressing inefficiency, then, not only helps agency leaders to build a strong workforce and maintain good relationships with their clients, but also increases their profitability and ensures their long-term sustainability. By streamlining processes, adopting automation and AI tools, and fostering a culture of efficiency, agencies can reduce labor costs, enhance the quality of their work, deliver more impactful campaigns, and set themselves up for long-term growth and profitability.
Though advertising agency leaders face a variety of challenges, inefficiency is one that cannot be ignored. With its potential to strain workforces, worsen talent retention woes, burden client relationships, and hurt agencies’ bottom lines, ignoring inefficiency comes at a steep price. In prioritizing efficiency, agency leaders can not only enhance productivity and morale but also position their businesses for long-term success in an increasingly competitive industry landscape.
__
Want more insights on how agency professionals feel about the challenges and opportunities impacting their jobs, agencies, and industry as a whole? We surveyed advertising professionals across the US to understand how they feel about the state of advertising agencies in 2024. Check out our 2024 Advertising Agency Report for all the top takeaways.
After several tumultuous years, agencies entered 2024 with optimism. Yes, there were some lingering concerns about the overall state of the economy, but forecasters were projecting an uptick in media spend. Sure, there were some high-profile layoffs, but overall, staffing in the industry was at an all-time high.
And fragmentation was still a problem, it’s true, but streamers were introducing new inventory on new platforms to showcase new content, with Hollywood productions back on track after two
prolonged strikes.
Overall, the advertising industry was looking strong. But what about the people working in it?
To find out, we surveyed advertising industry professionals from agencies across the United States, exploring how they feel about their jobs, their agencies, their industry, and the challenges and opportunities that are shaping their futures.
Among the findings:
To get more insights into the state of advertising agencies today, fill out the form to download the full report.
If you ever find yourself questioning the power of a well-defined brand identity, just look at companies like Coca-Cola and Nike. These giants are known for not only their products, but the emotions and stories associated with their unique brand identities: Coca-Cola is not simply a beverage, but a symbol of joy and unity; Nike’s ubiquitous swoosh logo and and “Just Do It” slogan are a celebration of determination and resilience. Such brands highlight the lasting influence of brand marketing, demonstrating its ability to shape consumer behavior and brand perceptions over extended periods of time.
Despite brand marketing’s time-proven effectiveness, performance marketing has captured the spotlight in recent years. With its focus on driving specific actions or results, as well as its ability to provide near-immediate measurement and attribution insights, many marketing teams have shifted their focus from brand building efforts to performance tactics. And given the mounting pressure on CMOs and advertising leaders to show the financial impact of their marketing efforts, the clear and tangible metrics offered by performance marketing hold significant appeal.
But such a narrow focus on performance tactics can lead brands and advertising teams to get stuck in a loop at the bottom of the funnel—one in which marketers may be driving short-term sales, but are doing little to build long-term brand identity and awareness. And emerging research is providing insight into the true value that brand building efforts can yield, demonstrating the need for marketing and advertising leaders to reconsider the connection between brand building and performance marketing, as well as how they communicate the value of these combined advertising efforts to key stakeholders.
In today’s digital age, performance marketing has become a dominating force. As advertising leaders face increasing pressure to demonstrate tangible returns on marketing investments—particularly after the economic turbulence of the past several years—performance marketing offers clear, measurable, and swift results, allowing companies to justify their marketing spend and optimize for maximum return on investment.
Brand building, with its focus on fostering long-term brand equity and emotional connections with consumers, often requires delayed gratification in terms of both seeing and measuring its impact. For smaller brands and clients, in particular, it can be difficult to justify these longer-term investments, as stakeholders want to see performance and assess its impact right away. Unfortunately, this has led many leaders to take an “either/or” approach to brand and performance marketing, rather than seeing them as complementary strategies. However, such a disparate approach to these marketing strategies can have negative impacts for brands and advertisers—particularly in the long-term.
Research has shown that the long-term effects of marketing account for 60% of total ad spend ROI, where short-term effects make up only 40%. If advertising teams focus all their investments on short-term performance tactics, they’re going to miss out on those potential long-term gains.
As such, taking a unified approach to brand and performance marketing is a must. As leaders reconsider their approach to this divide, it can be helpful to rethink the language used to describe these marketing approaches: All marketing—regardless of what it is labeled—is aimed at driving performance. Branding efforts are still performance, it just takes more time to measure and quantify their impacts.
Even more, taking a performance approach to brand marketing can be a helpful way to bridge the disconnect between brand vs. performance tactics. By calling it performance branding, and then having a measurement plan to back it up, leaders can more clearly demonstrate the value of brand advertising efforts.
And just what, precisely, is that value? According to the MMA’s Brand as Performance research series, brands that invested in brand building and increasing favorability with consumers saw a four times increase in sales lift and a five times increase in penetration lift. Brands with higher awareness also drive growth more efficiently than those with lower awareness—in other words, the stronger the brand awareness, the further each dollar of lower-funnel ad spending will go. And additional research has demonstrated that the long-term ROI of advertising is double the short-term ROI, further showing the value of investing in brand building alongside more lower-funnel efforts.
By recognizing the complementary nature of brand building and performance marketing and remembering that all advertising is intended to drive performance, leaders can increase their ROI and drive results in both the short and long term. They can also avoid the consequences of neglecting brand building in pursuit of immediate returns.
To effectively harness the power of brand marketing and maximize its full potential, leaders first need to be open to investing in brand building efforts.
For those on the fence or hesitant to move budgets away from more short-term tactics, it can be helpful to find small opportunities for testing. For example, marketers might choose to increase brand efforts in just a few markets via awareness-building video, then measure and assess the impacts over a few months and use the results to justify further brand-focused investments moving forward.
Once leaders are in a place where they are prepared to strike a balance between more traditional “performance” and brand building media investments, the question becomes: How much spending should go towards those shorter-term tactics vs. long-term brand marketing efforts? The answer will vary significantly by brand and client, and requires research based on a given brand, what’s happening in that brand’s category, what its competitors are doing, how consumers are behaving, and more. It also requires an openness to testing and learning to determine what mix is most beneficial for driving desired results.
For instance, let’s say you’re a B2B company. Research shows that, at any given time, 95% of potential buyers in the B2B space are not actively looking to make a purchase. But just because these customers are “out-market” now doesn’t mean they shouldn’t be advertised to. When it comes time for these consumers to make a purchase decision, they are probably going to gravitate towards the companies and brands they are familiar with—in other words, those advertisers who have invested in brand building efforts. Rather than only trying to connect with these audiences during the short and infrequent windows when they’re actually “in-market,” B2B brands should invest in long-term tactics to build awareness and familiarity so that, when it’s time for these audiences to make a purchase decision, their brand is top-of-mind. As such, for B2B companies, having a media mix that skews more heavily towards brand building often makes sense.
For a B2C company, on the other hand, it might drive better ROI to strike a greater balance between brand building and performance marketing tactics. These companies want to ensure they’re both generating sales in the short-term and building brand awareness and identity in the long-term to drive repeat purchases and brand loyalty, and they often aren’t dealing with the longer purchase cycles that B2B brands face.
Though the balance between performance and brand building media may vary, there are certain elements that are critical for all brand marketing efforts. Perhaps most fundamental is the development of compelling and consistent creative that resonates with target audiences. The primary goal of brand marketing is to establish and enhance the perception, awareness, and identity of a brand among target audiences, so taking the time to craft strong creative, A/B test it, and optimize it is crucial. Consistency is another key element of effective brand efforts, as it ensures that consumers receive a coherent and unified brand experience across various touchpoints, reinforcing brand identity and fostering trust and recognition. By maintaining consistency in messaging, visuals, and tone, brands can build familiarity and loyalty among their target audience, ultimately driving brand equity and long-term success.
Though performance marketing has garnered significant attention and investment by advertising leaders in recent years, neglecting brand marketing can have negative long-term impacts—particularly since brand efforts can amplify the results of performance marketing tactics. Brand and agency leaders seeking both short- and long-term results should take a more unified approach and consider how all their media drives performance. In doing so, marketers can maximize ROI on all their advertising investments.
