Is The Best Time To Advertise During A Downturn?

One of the more timely stories in advertising is about the different approaches Kellogg’s and Post cereals took during The Great Depression. 

The simple story is that Post cut its ad budgets, while its chief competitor, Kellogg’s, doubled budgets and invested aggressively in the new medium of the day: radio. By 1933, profits were up 30% and Kellogg’s had replaced Post as the world’s leading cereal maker, a title it still holds today.

The advertising industry often shares this story to warn advertisers against cutting budgets during an economic slump. But the real lesson isn’t “don’t cut advertising during recession,” it’s “don’t reduce share of voice more than competitors during recession.”

What really matters is your share of voice (SOV) in a category -- the amount of attention as a percentage of the total category -- and Kellogg’s was doubling its SOV at the same time Post was cutting its SOV.

This brings us to one of the few “laws of advertising”: the companies with the highest category SOV (advertising) generally win the highest market share (customers). 

SOV is likely the most important -- and underrated -- metric in advertising today.

The question is: why is SOV so underrated?

I suspect it’s a combination of three factors below:

• SOV is an academic concept buried in research few of us read
• SOV means money matters and some advertisers don’t like to admit budgets matter
• SOV has gotten harder to track in our fragmented digital advertising landscape

However, just like the 1929 depression created an opportunity for Kellogg’s, this downturn will create an opportunity for well-read and well-resourced advertisers.

In fact, economic downturns are likely the best chance a company gets to buy SOV cheaply at the same time competitors cut SOV.

Furthermore, savvy advertisers can take advantage of the highly fragmentation digital advertising landscape -- with its lack of differentiated quality and seemingly infinite supply -- to buy high SOV media at bargain rates.

However, you need the right data to separate high SOV digital media from low SOV digital media to pursue this strategy.

Fortunately, at Adelaide, we've been helping advertisers pursue this strategy for several years. Our attention analytics look at a number of key variables in media quality and role them up into a single metric, giving brands an easy way to find low-cost, high-SOV media.

Based on Adelaide attention data, here are 4 simple recommendations for savvy media buying right now:

1. Follow the attention, buy the news. There are bargains to be found at news brands. Most advertisers are reluctant to buy media next to COVID coverage, despite the fact that news consumption has skyrocketed and inventory has increased 30%. There’s no evidence that consumers care about brands putting ads next to news, but prices for high-SOV, high attention media on news sites are down no less. Combine newly cheap prices with early research from Lumen showing that, actually, people pay more attention to ads next to COVID content and you’ve got twice the reason to buy news sites. Finally, buying news sites also means you support the jobs of the industry covering the most important news story of our lifetime.
2. Optimize for attention, not “viewability.” The market has focused on buying high viewability ads, but high-attention ads -- low clutter, high duration, and large format -- are more valuable than high viewability ads. As evidence, an Adelaide client recently compared media optimized for Attention Units (our metric for identifying high attention ads) to MRC viewability. Our client found optimizing for Attention Units generated 85% more consumer attention and 70% greater brand perception, as measured by Kantar.
3. Invest in premium sites with scale. Because everyone is following the news so closely right now, it's the most effective way to get “premium scale.” So skip the content farms and invest in premium websites with big audiences and high attention ads. On a related note, we expect quality on long-tail, low-scale publishers to deteriorate further as they increase the number of placements per page, at the expense of advertisers, of course.
4. Prioritize reach over frequency. The enemy of reach is frequency. Advertisers can substantially reduce waste by using simple frequency caps. Enforcing publisher frequency caps will help you maximize reach and minimize frequency for any given campaign. It’s always important to avoid publishers with opaque frequency caps, but especially now when budgets are tighter. 

We hope brands will take our above advice to invest media budgets more wisely in this period, helping their businesses and helping quality publishers. Like Kellogg’s, those who invest wisely will emerge from this time stronger.