The Perks of Decreased Ad Spend


‘Look for economies of scale – an initial outlay may seem high, but if the campaign or Experience can be repurposed or updated simply, then its value grows exponentially.’

– Jay Short, Co-Founder,

Solarflare Studio

As inflation soars and consumers become more sceptical than in pre pandemic times, the talk of Ad Spend decrease grows. But in an interview with LBB, Jay Short, our Co-Founder and Client Services Director, explains that he believes this will provide an opportunity for brands and marketing agencies: ‘Across the board we are seeing the strain on the pockets of consumers, which will always lead to a knock-on effect of brands looking at where they will need to cut costs. Ad budgets always seem to be the first to fall, which is in many ways counterintuitive. It should be an opportunity to spend smart and take the chance to steal a march on your competition. However, it isn’t as easy as just throwing more money at the wall; it is about being bold, but also smart.’

What might be the consequences of a decrease in ad spend for marketing agencies in terms of new opportunities?

A decrease in ad spend equates to a decrease in visibility. The reality is that the consumers who had more disposable income before, will still need to spend, so remaining at the forefront of their minds is still important. The idea that you should just shut up shop and ride it out is counterintuitive.

There is little doubt that there will need to be a re-alignment in where the money is spent, but this change in the mix is not all bad. It has the potential to expedite the rise of new streams such as AROOH (Augmented Reality Out Of Home – think I may have just coined a new acronym!) but also the decline of more ‘traditional’ ad revenues that may have diminishing value, such as Facebook, or Snapchat, that some brands see as overpriced in terms of ROI.

Who will be the winners and losers from this?

There are no guarantees as to the winners and losers, but to give themselves the best chance, brands and agencies at the very least need to be aware of the possibilities, so that they can spot an opportunity when it arises. The big tip is to be constantly learning – education should be paramount and those that are able to think outside of the box will give themselves a distinct advantage.

Will there be more opportunities in specific industry sectors?

Retail will definitely be a key focus area for doing things differently and marketing more cost effectively. In the last 18-24 months we have already seen that brands are exploring new ways of doing things to attract their target audience – whether it be use of augmented reality packaging, or anamorphic billboard content for example. The squeeze on ad spending is likely to mean that augmented reality in particular is seen as a route to the ‘wow’ factor, but also as a way of reducing spend on OOH and traditional media.

Will there be more opportunities for specific marketing agencies?

The opportunity for agencies will be to have the tools at the ready so that they can spot the right time to suggest an alternative. We work with both brands and agencies and we’ve seen that there are some brands that are providing the ideas to their agencies, who then come to us. The best agencies should have this knowledge already so that they can combat ‘We are reducing our ad spend,’ with ‘This is understandable, but here is the opportunity’.

Jay’s top tips for agencies to ride the storm

  • Sometimes less genuinely is more – at times you do have to accept that the money isn’t there, so you have to think on your feet to find a solution.

  • Educate yourselves – the best agencies we work with have a breadth of understanding across the board.  This means that they understand when to recommend an innovative solution that hasn’t been done before, and when handing out discount vouchers in shopping centres might be more suitable.

  • Look for economies of scale – an initial outlay may seem high, but if the campaign/experience can be repurposed or updated simply, then its value grows exponentially. For example, data visualisation can provide a means of producing beautiful visuals that constantly evolve.  The cost is in developing the algorithm that will produce the visuals. Once this is done, it can be used time and time again across multiple markets, ad infinitum.

  • Be strategic. When looking at using cutting edge technologies and platforms it’s important to understand why you are using it. Fast media coverage is sometimes fine, but you should be thinking longer term as well. The best partners that we work with certainly are.