By Nicole Penn, President & CEO To our clients and valued community: As we look at the remainder of 2024, we find ourselves at a unique intersection of key macroeconomic and media trends: Growing geopolitical tensions A US election year Consumer spend slowdown due to inflation and interest rates Proliferation of AI integrating into all forms of media and content And, an Olympic year In short, for businesses and brands, Q2 and Q3 strategies need to work harder, especially in an overcrowded and competitive media environment. 2024 economic outlook and consumer sentiment JPMorgan forecasts below-trend 0.7% real US GDP growth for 2024 overall, with growth likely to walk the line between slight expansion and contraction for much of the year. While this represents a slowdown from 2023, we anticipate a “soft landing” rather than a recession. Consumer spending, which drives about 70% of economic activity, is likely to moderate but remain positive. JPMorgan projects consumer spending growth of 2.2% in 2024. However, consumers are becoming increasingly discerning and price-sensitive amid ongoing inflation concerns. Consumer Confidence Index: The Conference Board’s Consumer Confidence Index dipped slightly in July 2024 to 100.4 from 101.3 in May. The Expectations Index has been below 80 for five consecutive months, a threshold often associated with recession signals. (Source: “The Conference Board: US Consumer Confidence”) Globally, Morgan Stanley predicts a marginal 3% growth between the end of 2024 and into 2025. Companies should anticipate a challenging environment where consumers are more price-sensitive and discerning. To grow their business and profitability, marketers need to focus on strategies that resonate with cautious consumers and offer value amidst economic uncertainties. Impact of the 2024 US election The presidential election will be a major factor influencing both the economy and consumer behavior this year: Consumer sentiment often dips in the lead-up to elections due to uncertainty. Ad costs typically spike during election years as political campaigns compete for airtime. Political ad spending will reach $15.9 billion in 2024, up 31.2% from 2020. Some consumers may delay major purchases until after the election. In a recent survey, 62% of CEOs said they would postpone investments until post-election. Historically, consumer spending has rebounded quickly after elections conclude. With the addition of the Olympics to this big political season, media buys will need to be efficient, forethought-out, and adaptable. The media landscape is particularly challenging where marketing to “battleground” and “non-battleground” states is concerned: During the final six-weeks before Election Day, battleground states (or swing states, where the deciding vote could go to either candidate) will likely undergo an uptick in advertising costs. As Election Day draws closer, these costs will only increase, which means that marketers must carefully allocate their budgets and be exact in how they engage residents of battleground states. At the other end of the spectrum, marketers who cater to non-battleground states should prepare for a possible increase of 10% to 20% in advertising costs. This is on account of that final all-or-nothing push in political campaigns that require a great demand for extra ad space. Regardless of political classification—battleground or non-battleground—marketers can expect to be busy watching and reallocating budgets.(Source: LinkedIn: “What to Expect in Your Marketing During an Election Year.”) Additionally, a general change takes place in the collective psychology of consumers during an election year. Brand values and social responsibility are especially important, and they are hyper-tuned into whether a brand’s message aligns with these values. And while they study what brands are offering, they are also barraged by political messaging. As a result, their attention spans become overloaded, and they lose focus. For this reason, brands must know their respective audiences and be prudent in how often they present ad content to them for the sake of engagement. How are we helping our clients to face these 2024 headwinds and emerge successfully? Stealing competitive share: Think David and Goliath, Netflix vs. Blockbuster, Apple vs. IBM. When market demand or category interest is waning, it’s the time to steal market share from your competitors. We often employ a practice to identify white spaces and vulnerabilities in our clients’ competitors, identifying unmet customer needs with a focused plan to help fulfill them. This is a big part of 2024 strategies—especially regarding bigger tickets and considered purchases. Focus on growing lifetime value and revenue per customer: Keeping the previous observation in mind, knowing that your competitor is likely coming for your customer, it’s time to embrace this same customer a bit tighter. We’re focusing more resources on strategies to improve customer experience through real-time research to identify customer pain points and needs. We’re also consulting with clients to determine ways to increase both lifetime value and average order value that can be found in new pricing “bundles,” membership programs, and add-ons. Grounded plans, with a plan to pivot. If the first half of 2024 has taught us anything, change is inevitable. In basketball, players have a “planted foot” and a “pivot foot.” The planted foot keeps you grounded and a pivot foot keeps you on the ball. We’re working with clients to make sure they have their own planted foot and pivot foot; that their marketing and media strategies for Q2 and Q3 are locked in, solid and poised for success. This especially applies to media, where we’re capitalizing on the best rates and added value before many marketers will be ‘locked out.” At the same time, we are building our pivot plans with the knowledge that this year could be volatile. This will be accomplished through alternative messaging strategies, new pricing and promotional strategies, while also using our advanced analytics capabilities to track shifting consumer sentiment in real time, helping our clients stay ahead of trends. Leveraging the combination of our data tools with our real-time content studio means we can rapidly adjust messaging and media mix to capitalize on Olympic moments and navigate election-related volatility. Prioritize short-form video content: Approximately 90% of marketers are using short-form video plans to increase or maintain their investment in 2024. Platforms like TikTok are gaining traction with new demographics, with a 57% rise in “Baby Boomer” users since 2021. The key is to develop a strong short-form video strategy across multiple platforms to engage diverse audiences. (Source: Forbes: “Content Marketing Statistics for 2024”) Our Content Studio and Creator Network have been buzzing, building content and helping grow performance focused brand content at scale. Focus and measured AI strategies—SEO to GEO (generative engine optimization): While many marketers and brands are using AI and learning language models (LLMs) for content development, so are their consumers, thus ushering in a new era of search. In May 2023, Google rolled out an experiment of Search Generative Experience – SGE (which is now AIO) AI will bring in a new way of how we search and find information online and, as a result, how search ‘generative’ optimization is done. AI searches provide quick answers from across multiple sources for more complex queries than previously possible. As AI results continue to become more commonplace, users will expect a more personalized experience on websites to follow suit. We are working with our clients to update website content in ways that AI is more likely to scan and use in generative results as well as their third-party experience indicators (e.g., news and digital PR) for a new AI-powered search world. While 2024 may be uncertain, your success doesn’t have to be. If you’re interested in a Q3 and Q4 Success Roadmap, contact us. Cheers to the future, Nicole Penn
