“It’s the economy, stupid.” When James Carville coined that phrase in 1992, it really struck a chord. So much so that we still say it over 30 years later. At this moment, we find ourselves with an economy that is perplexing the experts. Recession loomed large heading into 2023, but it hasn’t materialized despite continued interest rate hikes by the Fed. In fact, the US economy grew 5.2% in Q3. Inflation is hurting everyone, yet it’s technically under control now (although prices haven’t come back down). Unemployment is at all-time lows, and wages are up! So we are left to ask ourselves, “What does the future hold for the economy, and how do we plan our marketing when things are so unpredictable?”
A recent study by research company Ipsos noted that 32% of Americans plan to spend MORE money this holiday season than last year. Up from 24% in 2022 and 21% in 2020. That number gets even higher, 50%, when you only include Millennials and Gen Z. But wait, the economy is supposed to be bad, isn’t it? Isn’t that the major argument for change in The White House?
The Ipsos study paints a different picture. Consumers are ready to spend over the holidays, and as a marketer you need to be in front of them. Maybe that’s why some are predicting ad spending growth of 4.3% in 2024 (excluding political ad spending).
A recent study by research company Ipsos noted that 32% of Americans plan to spend MORE money this holiday season than last year.
If we look back at early 2023, many pundits were predicting the ad industry would shrink. Eleven months later, that’s not what the numbers say. In fact, 2023 ad spending looks to be up by 5%.
But what if you didn’t get the memo? What do you do if you were expecting a slower holiday season and cut back on some of your ad spending?
First, we would, probably unsurprisingly, argue that cutting your marketing budget is almost never a good idea. It was Henry Ford who said, “A man who stops advertising to save money is like a man who stops the clock to save time.” Forgiving the era-related gender exclusion in his quote, he’s still right. (And Ford Motor Company is still practicing what he preached, with an estimated ad spend of $1.4 billion in 2022). Cutting budget will generally hurt more in the long run than any savings gained in the short run. That said, Ipsos points out that 55% of shoppers do all of their holiday gift buying in November and December, so it’s not too late if you have cut budgets to take advantage of this newfound holiday bullishness.
Instead of slashing your marketing budget, find savings through cost-efficient, performance-focused spending. Lean into your life-cycle marketing channels while targeting new consumers with social and digital spends. Email, social media, SMS and digital video are all channels that you can turn up quickly and push for those late holiday campaigns.
So sharpen those marketing tools and go get those extra holiday dollars before it’s too late. As you turn towards 2024, remember what Ford said and keep reaching out to your customers with creative messaging and engaging content. No matter where the economy goes, you have to keep your brand top of mind.