Franchise Marketing Economics: How to Maximize Ad Spend in 2023
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When reviewing data from most 2023 media forecasts from eMarketer and other similar research firms, there is a consensus that while advertising spend growth will continue in 2023, it’s likely to be at a slower pace than previous years. With the economic outlook featuring lots of uncertainty, many brands and marketers have signaled that there is a renewed focus on ensuring marketing budgets are spent more efficiently this year. Every dollar counts and the adage remains; never stop marketing. So how can franchisors adapt and maximize marketing ROI this year?
Optimize your data and measurement technology stack
Properly measuring the effectiveness of marketing and advertising continues to be a challenge faced by many franchisors and franchisees alike. Adding to those challenges are ongoing shifts in digital media as the ad tech industry evolves to better account for the privacy of consumers and restrict certain data made available to marketers. One example is Meta, which saw significant changes to its ecommerce business resulting from Apple’s iOS 14 update that impacted tracking pixels and performance data for campaigns running on its network. These types of massive industry changes, combined with a digital customer journey that only continues to become more complex, make the current conversation around marketing attribution robust. Gaining a clearer understanding of how your marketing and advertising connects with your target audience and moves them through the decision-making funnel requires breaking down measurement barriers between channels and going beyond impression data and click data. Incorporating data from your CRM with your sales data, your offline conversion data and your ad campaign data will offer a clearer picture of which marketing channels are performing well and which ones need to be revaluated. Developing a closed-loop reporting system that allows your business to pull in more revenue- and profitability-driven metrics alongside marketing KPIs is a key step in the right direction. Further implementation of technologies like customer data platforms (CDP) can be incredibly beneficial in the measurement process and will also position your business to better capture and leverage first-party customer data, reducing reliance on third-party data sets that only grow more antiquated with time.
Outsmart rather than outspend
One outcome of the pandemic for marketers is the need to be more agile and adaptable to real-time changes in business operations, marketing, and media planning. As the economy continues to demonstrate signs of slowed growth, having a strategic marketing mindset that focuses on testing, innovation, and agility to make your brand stand out in the marketplace will prove more beneficial than simply trying to outspend your competition in 2023. Digital ad spending is forecasted to continue taking a larger chunk of traditional total ad budgets versus traditional, with significant growth in CTV/OTT projected, in particular. Digital media like paid search ads still provide significant opportunity across most business categories to capture high-intent, lower-funnel customers at a reasonable cost. Tik Tok may have significant opportunity for retail marketers, but is it right for your brand? Regardless of what media or marketing channels have performed well in the past, it’s important to have a testing mindset in 2023 and a potentially nimbler approach to media planning (i.e., quarterly vs. annual) to get the most return for every dollar in the marketplace.
The lukewarm 2023 economic outlook likely means every marketer will be increasingly accountable for performance. Having better data at your fingertips can help you transform your decision-making regarding the actual business outcomes driven by marketing. Better data combined with a dedicated a budget for testing new ideas and innovative tactics can help you keep your franchise system ahead of the competition.