The recent implementation of new tariffs on imports from Canada, Mexico and China has introduced significant challenges for businesses across various sectors. These policies are causing ripple effects across industries—especially in automotive, electronics and fashion—leading to higher costs and shifting consumer behaviors.
And, advertisers aren’t immune to the impact. A recent IAB survey found that 94% of advertising decision-makers are worried that tariffs on imports from China, Canada and Mexico will take a toll on ad spend this year. In fact, 71% of respondents expect budget cuts as early as Q2 or Q3, with nearly half planning to scale back their own spending. Some predict overall decreases of 6% to 10%, while nearly a quarter brace for cuts between 11% and 20%.
So, what does this mean for brands and advertisers? It’s a tricky time, but it’s also an opportunity to rethink strategies and get creative. In this blog post, we’ll explore how advertisers can navigate these uncertain times using more efficient strategies—ensuring their messages still resonate with consumers and continue to drive impact for brands.
Don't Pull Back - Adapt
Cutting back on advertising might seem like the obvious move, but history shows that brands that stay visible during economic downturns tend to come out stronger on the other side. While consumers may adjust their priorities, they still look for value, practical solutions and even “affordable luxuries.”
The Lipstick Index:
This term, coined during the 2001 recession, refers to consumers' tendency to continue spending on small indulgences even when cutting back elsewhere. Today, we see a similar pattern in how consumers are increasing their health and fitness-related purchases—an unexpected trend that offers unique opportunities for marketers.
P&G’s Recession Strategy:
P&G took this approach in both 2009 and 2020, recognizing that economic downturns offered a chance to capture market share from weaker rivals cutting back on advertising. By increasing its ad spend, P&G was able to gain a larger share of voice in the marketplace, and eventually, won a larger market share. The key here, especially in the NA market, was to produce marketing materials that cut through the crowd and resonated with this diverse internal audience on a deeper level.
How to Advertise During Uncertain Times
In today’s uncertain environment, advertisers need more than just traditional demographic targeting—they need data-driven insights to connect with audiences in meaningful, non-intrusive ways. Here are a few strategies for adapting your advertising approach:
Contextual Targeting Over Demographic Targeting
In an era of tighter budgets, it’s more important than ever to avoid wasting impressions. Traditional demographic targeting is becoming less reliable, especially as consumers demand more relevant ad content. Contextual advertising, on the other hand, ensures that ads appear in the right place, at the right time and in the right mindset—without relying on personal data.
For example, imagine a consumer is searching for affordable skincare routines. Instead of showing a generic beauty ad, data-driven solutions can help identify the right moment to showcase a “luxury for less” skincare product—aligning your messaging with the consumer’s intent.
Solution-Based Messaging Over Fear-Based Messaging
In times of economic uncertainty, consumers are more likely to engage with brands that offer practical solutions rather than fear-driven messaging. Rather than focusing on the crisis itself, position your brand as a helpful guide to navigating tough times.
For instance, instead of saying “Worried about rising costs?”, a more effective approach could be “Here’s how to save on everyday essentials.” This shift in tone builds trust and resonates with consumers who are looking for solutions.
Finding Unexpected Connections: Creative Expansion
Economic shifts often result in new and unexpected consumer priorities. These changes can open up new opportunities for brands to find creative connections between seemingly unrelated trends.
For example, data-driven insights could reveal that health-conscious consumers are also increasingly purchasing pizza. A brand could tap into this unexpected behavior by promoting a healthy frozen pizza option in fitness-related content, reaching an audience they might not have initially considered.
Lower Funnel Focus: Turning Uncertainty Into Opportunity
During uncertain times, consumers are more likely to conduct research, compare options, and seek deals. This presents an ideal opportunity for brands to focus on lower-funnel strategies, such as discounts, coupons, and value offers.
Running contextually relevant promotions ensures that your brand is visible at the right moment, when consumers are making purchase decisions. Brands can also validate real-time intent through search queries and social mentions, adjusting messaging dynamically to meet demand.
Better Budgeting: Maximizing Impact, Minimizing Waste
When every marketing dollar counts, eliminating waste becomes a top priority. Data-driven solutions can help brands identify high-impact placements, ensuring that ads reach the right audience without overspending or causing ad fatigue.
For instance, rather than broadly targeting a large audience, a car brand could use more refined targeting to reach only consumers researching budget-friendly vehicle options, ensuring that every dollar spent is being put to its most efficient use.
Increase Your Reach and Relevance with Mindset Graph™
Traditional advertising strategies may no longer suffice, necessitating innovative approaches to connect with audiences meaningfully. GumGum's Mindset Graph™ emerges as a pivotal tool in this context, offering AI-powered insights that align consumer mindsets with advertiser goals, thereby enhancing targeting precision and campaign effectiveness.
Understanding the Mindset Graph™
The Mindset Graph™ is an advanced data engine that integrates GumGum's core technologies: Contextual, Attention, and Creative to deliver more effective advertising that resonates with consumers. By analyzing the intersection of these elements, it identifies optimal contexts, topics and keywords for ad placements in real-time. This approach ensures that advertisements resonate with consumers' current interests and environments, fostering more authentic and impactful connections.
The Mindset Graph technology scans and categorizes the internet using advanced contextual AI to analyze webpages, videos, and images. It identifies meaningful content and sentiment, ensuring a deep understanding of the digital landscape. By measuring attention signals, it tracks real audience engagement, allowing ads to be placed in high-attention environments where they are more likely to resonate.
Leveraging The Mindset Graph During Times of Uncertainty:
📈 Allows for real-time customer segmentation as it detects changing consumer sentiments and needs based on real-time topic clustering across the open web.
📈 Matches ads to high-performing contexts so your brand message appears within content that naturally fits, limiting wasted impressions and maximizing campaign budgets.
📈 Compared to identity-based targeting, the Mindset Graph™ delivers measurable improvements, including a 10% increase in recommended intent, a 7% boost in search intent, and a 6% lift in brand relevance.
