Marketing Brief: Why marketers will no longer focus solely on “use it or lose it” spending in the fourth quarter

And whenever this is the case, much greater investment discipline is also required. Marketers typically encourage ad buyers to find more performance-based spending opportunities that will help them meet their revenue goals, rather than simply parking advertising dollars somewhere to avoid losing them next year in the hands of CFOs who are looking to cut costs, according to seven ad buyers Digiday spoke to for this story.

However, as marketers’ advertising budgets become tighter and there is an increasing focus on performance, and the ability to track daily performance across different platforms has become the norm, there is greater overall responsibility for ad buyers. With that in mind, there is a sense that even during what some ad buyers have called the “couch cushion” spending season, there is now also greater responsibility over how it is spent.

“Historically, we’ve gotten about a million dollars’ worth of last-minute, ‘use it or lose it’ requests every year,” said Mike Feldman, senior vice president and global head of retail media at Vayner Media. When last-minute requests come in, marketers focus on finding ways to accommodate those expenses rather than simply spending money. “Now we’re getting last-minute inquiries about how we can hit sales.”

Zach Ricchiuti, Client Solutions, associate vice president at Kepler, shared this sentiment. “Early in my career, it happened all the time,” he said. “At the end of the quarter, our customers came to us and said, ‘We have a million dollars.’ (There are still) three days left in the quarter. “We have to spend it now or we’ll lose it.” That just doesn’t really happen anymore. Or at least…it definitely didn’t happen this year.”

Examples of more responsible additional budget spend include activating YouTuber partners or activating more channels in the Amazon DSP or testing retail media channels like Costco, to name a few examples that buyers may have suggested to marketers for limited additional spending this year have.

This time of year, marketers are in an even more performance-oriented mindset than usual, thinking of ways to “juice your performance engine,” noted the first anonymous ad buyer, who said that more creative ideas often tend to falter when they don’t take off an activation checklist that proves that they can definitely increase performance and do it easily. For the buyer, this checklist includes questions like: “Can we get this budget under way in the time needed?” Do we have the resources to make it work? Does this require additional approval cycles from the creative team or the client team?”

Marketers want to drive action with their advertising dollars. So instead of telling ad buyers, “Try something new, they’ll say, let’s compare it to something tried and tested that has worked in the past and that we believe in,” said Jennifer Kohl, chief media officer at VML. “It’s not necessarily a Net New partner or a Net New media channel.”

However, the fourth quarter is already a high-stress time for agencies, and the added stress of not only finding ways to spend last-minute advertising dollars but also finding quick and flexible ideas that meet sales goals can be difficult.

“By and large, customers have become much more conservative (in their spending),” said a second ad buyer who wished to remain anonymous.

That probably won’t last until next year, but media buyers are hoping marketers start planning sooner and have contingency plans in case they have additional expenses so they can activate and vote quickly. This is particularly tricky this time of year, so shoppers say it’s most effective to plan ahead in case additional expenses arise.

Sam Bradley contributed reporting.

Lexus’ December to Remember seasonal sales campaign is now in its 25th year. In 1999 the media landscape looked very different.

We’ve certainly changed it over time. Our newest, broad-based broadcast spots are cable sports, and we really try to focus on highly-watchable sports programming like Sunday Night Football, Amazon’s Thursday Night Football, college football, the NHL and the NBA. (The focus on sports) has been a goal of Lexus advertising in recent years. I can’t share the actual (media budget) breakdown, but it’s largest for broadcast spots and social media.

What social platforms does Lexus focus on for paid social?
We run digital content across all social media platforms, but this year we’re excited to partner with some content creators on some unique holiday-themed projects. We do a lot of this on TikTok.

Are there any concerns about the kind of question marks over TikTok’s continued existence in the US?
This is certainly a hot topic across all advertising and media channels. We are happy to work with them specifically for this December to Remember event as they will be there for at least the rest of this special campaign. — Sam Bradley

Using the numbers

According to a survey by German agency network Serviceplan of top marketers in eleven markets – including Germany, Great Britain, France and the Netherlands – European CMOs do not believe that the economic situation will improve next year.

Fifty-one percent Of the 835 marketers surveyed said they do not expect the economic situation of their brands to improve or worsen next year. Twenty-three percent said they thought the situation was getting worse 2% on last year while only 21% said the economy is likely to get better – down 8% last year. The survey also found:

• 0% of marketers surveyed in Germany and the UK believe the economy is likely to improve next year. Happy New Year everyone!
• 37% of marketers surveyed said they expect their marketing budgets to increase next year. 36% said theirs would remain the same while in the UK 44% said they expected spending to increase.
• Only 23% said sustainability was a “very important” focus for them; AI agents (31%), prices (27%) and marketing automation (29%) each registered with a higher priority. — Sam Bradley

Quote of the week

“The conversation now is, ‘I want to see your AI workforce plan’ and ‘I specifically want to see the people who work at my company who are AI pilots’ and ‘What tools they will be using.’ my business?’”

— An agency founder and CCO when asked about the threat posed by AI to young creatives.

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