By Timo Pelz, VP of Business Marketing, Reddit
With headlines spelling doom and gloom – whether it’s phrased as macroeconomic pressure, strained supply chains, or a looming recession – the environment doesn’t bode well for vulnerable marketing budgets in a time of cost-cutting.
Despite this, I’d like to offer some contrary advice as ad spend turns down: marketers, now is the time to lean in. Analyzing Reddit data, we’ve learned that people are being more considered about where and how they spend their money, but they are still spending. For example, did you know that:
- 73% of UK Reddit users are not delaying any big purchases for the time being (Global Web Index, UK, April & May 2022).
- The community r/moneydiariesactive has seen +20% growth in recent months, as users are tracking and comparing spending (Reddit Internal, Global Data June 2022).
Here are three tips for brands as they lean into this climate:
Less impulse, more rationale. In times like these, we see a shift away from impulse buying towards more research and recommendation-based purchases. Consumers are still spending, but they are being more thoughtful about how they justify purchases. On the flip side, openness to trial increases as consumers are motivated more by cost and value, than brand loyalty. As a result, marketers need to be both on the offense and defense as brand loyalty wavers and the openness to trialling new brands and products increases. This means a strategy that targets existing customers to remind them why you’re their number one is just as important as one that seeks to gain market share with new customer deals and offers.
Refresh your messaging. When people are facing uncertainty, brands need to acknowledge the situation, restate their values, and be real. Messages need to be harder hitting and convey why a brand or product is of higher quality or unique. As consumers start to eliminate excess spending, it’s imperative that a brand value is clear. Now is the time to tweak value propositions to reassure consumers of the benefits of your offerings. Products might be higher quality, locally produced or offer a guilt free way to escape the doom and gloom.
Reach audiences where they research, compare and hunt for deals. Online communities like those found on Reddit are spaces that provide a trusted source of information for people who want assurance they are making sound decisions about where they spend their money, and are actively seeking out advice and recommendations from others. 45% of UK Reddit users say they’ve made financial decisions based on the information they’ve found on Reddit. Brands that get in front of their audiences in these kinds of environments are meeting them where they are most leaned in and ready to take action.
Above all, remember that now is a good time to spend. As the current economic climate is forcing advertisers to reconsider budget allocations and inevitably pull back from some of their digital channels, savvy marketers can take advantage of media efficiency gains. A broader pull-back in spend alleviates cost per impressions, which typically skyrocket in Q4, and creates upside in less competitive auction environments, especially for always-on platforms. Now is not the time to pull back spend, it’s time to take advantage because every pound is worth more in this environment.