Ad Age: Why advertisers are still making space for experimental budgets even with economic uncertainty

With ad spend under more scrutiny than ever, brands should continue looking for cost-efficient and relatively new ways to boost brand awareness, especially as go-to performance marketing channels have proven less effective thanks to data privacy measures. Over the last 18 months of data privacy rollouts from Google’s crumbling cookie to Apple’s iOS 14 update, targeting and measurement have become muddied. The changes have sent advertisers scrambling to find new ways to reach consumers.

They are doing so by testing more brand awareness channels, including ad-supported streaming services like Hulu, YouTube and now, Netflix, TikTok and other media channels. The purpose for maintaining that test and learn budget is to ensure advertisers’ eggs aren’t all in one basket, diversifying media spend.

At Fitzco advertising agency, an estimated 10-15% of client ad spend is typically dedicated to testing and learning. Overall, budgets have been either flat or down 5% across the board. Still, Claire Russell, head of media at Fitzco, says it’s almost mandatory that clients maintain that 10-15% experimental budget to continue testing and and learning throughout economic uncertainty.

“We’re working to try and retain the experimental bucket as much as we can by aligning it to an overarching learning agenda,” Russell added via email. “Even within flat to down budgets, we’ve still seen clients have an optimistic outlook and openness to experimenting.”

In the past, Fitzco clients have leveraged streaming video ads before, but minimally. Recently, they are investing more in platforms such as YouTube, Disney+ and Hulu. (She did not provide exact spend figures). “They want to look at, how do we get different creative in video, how do we spend more [ad dollars] there, how do we start looking at things like brand lift,” she said.

Meanwhile, independent media agency, Ocean Media, is seeing client growth in podcast advertising as well as streaming audio as more consumers use these services, according to Clintton Fleschere, chief client officer of Ocean Media. The majority of the investments are in Pandora, Spotify and iHeart radio network. “What was found was [that], where consumption goes, that’s where you’re going to be able to test out, learn and gain the best learnings,” he said. (It’s unclear what that testing looks like as Fleschere did not provide exact figures.)

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