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How to craft a resilient media budget amidst inflation.  

Lately, inflation and the looming threat of a recession have preoccupied everyone's thoughts. These fiscal forces have caused a ripple effect that is felt throughout the entire economy, and the grocery industry is no different. As inflation tightens its grip, consumers and brands alike find themselves looking for ways to stretch their dollars, whether it’s in the aisles of grocery stores or advertising budgets. 

According to the IMARC Group, the global advertising market size will reach a staggering $834.9 billion, an increase of approximately $219.7 billion from 2022. While prices continue to climb at a dizzying rate, retailers can take important steps to maximize the value of their investments. Below, we explore the impact inflation is having on marketing and how brands can create strategies to overcome this difficult season. Allowing both CPGs and their customers to get the most bang for their buck. 

Transforming Dollars into Value

Any successful business is defined by its ability to get good leads. A study by Linchpin SEO recently revealed that the average cost per lead for the consumer products industry stands at $105. When confronted with the inflationary tide, wasting resources on subpar leads is a losing battle. 

Converting high-quality leads into paying customers offers retailers significant value. These customers become more likely to engage with your store, make purchases, and even become loyal customers. Quality leads also allow retailers to tailor their marketing efforts more effectively as they gain a better understanding of their target audience's needs and preferences. By focusing on generating high-quality leads, retailers can avoid wasting time and resources on leads that are unlikely to result in tangible sales.

Two Winners, No Losers

Inflation doesn’t just tighten customers’ purse strings, it also reshapes their spending habits. Coupons can be an important tool for retailers trying to navigate the challenges of inflation. During periods of rising costs, consumers become more price-conscious, making coupons a compelling incentive to maintain their engagement. As consumers seek ways to cut back their expenses and find deals, coupons can help to make them feel more in control of their spending. 

And the proof is in the numbers.

An astounding 96% of Americans reported using coupons on an occasional basis, allowing brands to reach a broader audience and generate new sales.

In fact, 67% of customers admitted to making an unplanned purchase only because there was a discount or coupon offered. To leverage the power of coupons effectively, brands should consider offering discounts on essential products or bundled packages that provide exceptional value. Furthermore, using analytics to target specific customer segments and personalize coupon offerings proves to be highly effective. Consistently communicating these coupon promotions through various channels, such as email marketing, clip and print, and pop-ups, helps to maximize their reach and impact. 

Maximizing Your ROI

Costs per click (CPC) is a pivotal metric in online advertising that has been significantly impacted by inflation. As inflation erodes the purchasing power of both consumers and retailers, the competition for digital ad space intensifies, driving up CPC rates. With the average CPC typically being between $1 and $4, having a marketing strategy that focuses on CPC rates is vital to a business's success.

To navigate this landscape effectively, start by carefully analyzing and adjusting your advertising budget to accommodate for higher CPC rates. Prioritize high-quality, relevant ad campaigns that resonate with your target audience to ensure a higher return on investment despite the elevated costs. Lastly, continuously monitor and optimize your campaigns to identify cost-effective keywords and strategies that yield the best results. By taking these actions, businesses can navigate the inflationary landscape in digital advertising more effectively.

Strategies That Thrive 

Inflation can pose significant challenges to shoppers, retailers, and brands, particularly when it comes to marketing and advertising budgets. Remember, adaptability and strategic planning are your allies when it comes to triumphing over these obstacles. If you have any further questions or need additional guidance, please don't hesitate to reach out to Adsta. Together, we can overcome the effects of inflation and achieve marketing success in any economic climate.