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When Your Client Pauses Ad Spend

when your client pauses ad spend

Working with clients in travel, brick-and-mortar retail, hospitality and live entertainment right now is a bit of a hot mess.

These brands are pausing their ad spend as their businesses get completely shut down – which makes it tricky for media agencies to perform their regular duties.

“It’s volatile, chaotic, uncertain and ambiguous, and on top of that, it’s moving really fast,” said Coleen Kuehn, EVP of travel, media and entertainment at Merkle.

Today, agencies are busy making urgent changes to in-market campaigns. But long term, they’re scrambling to figure out how to remain strategic and valuable to clients that may not be buying ads again any time soon.

“We’d be naive to think there’s not added anxiety and pressure here,” said Bobby Palmieri, CEO of independent agency Lilo Social.

The new day-to-day

Agencies still have work to do with clients that aren’t spending – for now.

Even businesses that are shut down, for example, still need to talk to their customers. Merkle’s clients in travel and hospitality are using email and social media to reassure customers they can cancel their trips. They’re also trying to appropriately maintain brand awareness for when the world is ready to travel again.

“If you turn the lights off, you lose brand continuity,” Kuehn said.

Other industries are looking for ways to ship product at a discount while they can. Digital agency Adlucent has two B2B manufacturing clients: one makes sports equipment for schools, and another makes industrial cooking supplies for restaurants. Demand has dried up for both, and employees can’t go into the factories because of shelter-in-place orders.

So the agency created promotions for both brands to sell supplies at a discount while they last, changing messaging on their websites from generic notes about ship times to highlight the offer.

“We’ve seen demand lower, but they’re capturing more orders,” said Adlucent SVP Jason Roussos.

Even less obvious categories are keeping their agencies busy in the immediate fallout. Two Lilo Social clients – a makeup company and a luxury apparel brand – have seen demand shrink as people, stuck inside, lose incentive to dress up. But the agency is working to keep awareness strong and tweaking messaging for when people are ready to put on their fancy clothes again.

“We’re slowly scaling up spend while figuring out what works,” Palmieri said.

Beyond immediate campaign changes, agency teams are turning to back-office tasks to fill their time, including updating client websites and apps, backfilling creative and organizing email flows so their clients can be ready to go live when they turn spend back on.

“While nothing consumer-facing is happening, we’re getting ahead on the back end,” Palmieri said.

Long-term outlook: unclear

But there’s only so much work a media agency can do for a client that’s not buying media.

Agencies are trying to take the opportunity to be more consultative during this time by tracking consumer media shifts, performing predictive analyses on possible economic scenarios and helping clients understand the long-term effects of pausing their ad spend.

That work often requires repurposing talent. Adlucent and Lilo Social are reallocating talent away from inactive clients and onto accounts that are seeing business surge, such as a DTC cat litter brand and health equipment manufacturer.

Ad ops teams and programmatic traders at Goodway Group are applying their analytical skills to help clients understand where to engage with consumers when they’re ready to spend again.

“They’re really good at disseminating data,” said Amanda Martin, VP of enterprise partnerships at Goodway Group. “The information they use to execute technical optimizations also have a lot of insights to be gleaned.”

Agencies are also scenario planning for how clients can ramp up spending when they feel ready. Goodway Group is making decision trees to present clients with different “if this, then that” scenarios about the economic fallout of the crisis. And Merkle is ready to take over its clients’ in-house functions if their staff gets sick with COVID-19.

But many agencies are offering these services for free as their regular work sputters to a halt, and it’s unclear how long they can bear that expense.

“There’s only so much work you can do,” Roussos said. “The reality is clients that have to pause are in harsh cash situations.”

Managing anxieties

As brands pause ad spend, agencies must focus on keeping morale high, prioritizing workloads and reassuring employees worried about their job security.

“We’re trying to present it as an opportunity to get super creative,” Palmieri said, “but it would be foolish to think there’s not stress and anxiety, both personally and professionally.”

Adlucent checks in with clients every day to triage critical work. OMD gives employees a two-hour work window to focus on urgent client tasks while it talks to clients frankly about how to prioritize what needs to be done quickly.

“Some clients would rather have it fast than pretty,” said Scott Downs, chief client officer of OMD US. “People need to be comfortable having conversations with clients about that.”

While bigger agencies with a diverse client mix are more insulated from specific accounts, smaller agencies must often lay off employees when certain clients are struggling. That’s led to many employee questions about the health of account teams and their agencies overall.

Leadership can only try to be as forthcoming as possible. Both OMD and Merkle hold weekly all-hands meetings that include direct Q&A sessions with leadership, and smaller agencies are checking in with their teams daily.

“We’re trying to be as transparent with our people as possible without freaking them out,” Roussos said.

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