5 methods for leveraging digital advertising during a downturn

For those on the sidelines, the story of digital advertising over the past couple of years has been as entertaining as a binge-worthy TV series. Apple’s App Tracking Transparency (ATT) policy kicked things off in spring of 2021, and the plot only thickened with rising inflation, a likely recession and an unexpected cast of new ad platform characters: Netflix, Uber, and, curiously, Apple.

While dramatic, these headlines tend to gloss over what’s actually going on: Digital advertising may be in transition, but it is not dead. Consumer brands, especially direct-to-consumer (DTC), continue to rely on digital advertising and there are a growing number of ways to use it well.

Based on our work with hundreds of brands, along with a recent survey of 158 consumer marketing leaders, outlined below is what we know about the current advertising landscape. We’ve also compiled tips for navigating these options to cost-effectively capture revenue this holiday season and beyond.

Setbacks abound, but startups must be even more creative

The chaos of the past year has left advertisers with an ever-changing field of imperfect options and the need to continuously revise their approach. As changes driven by privacy concerns weakened the ability to target consumers, particularly on Facebook, 46% of consumer marketing leaders surveyed by Proxima said “difficulty targeting” and “limited budget” were their top two challenges to marketing effectiveness. About 40% specifically said changes to iOS’ privacy policies had a negative impact on their business.

Not surprisingly, the impact has been disproportionately felt by smaller startups. Among those surveyed, 70% of large companies expect to exceed 2022 revenue goals, but only 52% of SMBs reported similar levels of optimism. The SMBs in the survey were also 20% more likely to report that changes brought by iOS’ privacy policies have had a negative impact on their business.

Dramatic headlines may be masking upside opportunities

It is important for consumer startups to sift the opportunities from the doom and gloom headlines. For example, Meta’s stock price is much less important to you than the number of users on Facebook, which saw 1.93 billion daily active users in Q3 2022.

TikTok is more popular than ever, which is great for brands that want to experiment with a growing platform. But Instagram’s 2 billion monthly active users are hardly a thing of the past, which means the platform still presents a huge opportunity for brand building and engagement.

Despite a rocky road, consumer advertisers are hanging on

Not surprisingly, the levels of satisfaction with ad platforms included in the study — Facebook, Instagram, TikTok, Snapchat and Google — were notably low, with dissatisfaction rates ranging from 31% to 65% depending on the platform.