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Why marketers are expanding experimental budget testing

Topic: Why marketers are expanding experimental budget testing

Over the last year of pandemic-induced disruptions and accelerations, more marketers have increased the percentage of their digital ad dollars to experiment with emerging platforms and technologies like TikTok and SMS.

The coronavirus crisis has upended the way people shop as the industry knows it. Consumers are spending significantly more time online to shop, stream and connect with others, forcing marketers to be flexible and diversify their media spend in a move to meet customers where they are.

There’s also the looming depreciation of third-party cookies, stifling programmatic efforts, and social media’s pay to play environment isn’t conducive to the tightened media budgets that lay in the pandemic’s wake, according to marketers.

“What used to be a more linear customer journey is now all over the place,” said Jill John, chief customer officer at direct-to-consumer furniture company Interior Define. “So we want to make sure we’re messaging in a relevant way across multiple stages in the funnel across multiple target audiences.”

In addition to doubling their total digital marketing budget this year, Interior Define has grown its experimental budget from 5% to 15%, according to a company spokesperson. The majority of the DTC brand’s ad dollars go toward performance marketing tactics. But in a recent effort to diversify media spend and reach more consumers, John said the team has launched SMS marketing efforts, podcasts, direct mail, CTV and influencer-focused marketing.

“A lot of this testing budget and reason for diversifying is just reading where our customers are going,” John said. “We have found through COVID that there’s all these different platforms where our customers are now joining.”

Several other brands have also upped their experimental budgets and moved to diversify their media spend over the last year. Media buyers say flexible media channels like CTV are gaining traction, while cable television ads are less attractive in today’s volatile business and fragmented viewer environment.

For example, footwear brand Reef dedicated 5% of its digital media budget toward experimental channels such as text-based marketing and CTV last year. Meanwhile, DTC men’s soap brand Dr. Squatch dedicated 10% of its digital ad budget to Snapchat after finding success in experimenting with the platform.

It’s a similar story on the agency side, per Chelsea Cannon, associate media director at full-service digital marketing agency Chemistry.

Topic Discussed: Why marketers are expanding experimental budget testing

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