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Seven tips to consider before reducing headcount - Programmatic in-housing & marketing consultation

As social distancing continues, the stress on the economy grows. This has had a ripple effect causing companies like Anomaly and Giant Spoon to reduce headcount by 20%. Others are implementing furloughs or decreasing salaries to slow the burn. WHAT’S HAPPENING TO OUR LIVELIHOOD: It’s no surprise that unemployment rates are skyrocketing. If you’re included in these numbers, then we recommend researching your unemployment options as submissions are getting backed up due to the number of applicants. There’re also other resources you can take advantage of when you’re ready to get back in the market. As you'll see from the chart below, the recessions we have weathered previously don't compare to the 6.648M people reported as of March 28th. As COVID numbers climb so will unemployment so please remember to plan for the worst and hope for the best. 

As of last week, the market had communicated that 38% of budgets will drop more than 25% (source: Beeswax). As we get more comfortable with our situation, we are now finding that 22% of brands said they’re spending more on ads, up from 16% last week. Brands that mostly sell in higher-demand essentials and new essentials categories (beauty and cosmetics, food and beverage, health and fitness, office supplies) are increasing their ad spend for obvious reasons.

66% of brands that are spending more on ads are also seeing increased efficiency, up from 58% last week. Their cost per 1,000 impressions (CPMs) are down and cost per click (CPC) is flat or down, resulting in their return on advertising spend (ROAS) trending much higher than normal. The cost efficiency exists because of the increased supply in the market due to paused/cancelled budgets. Smart marketers know that this is an opportunity should they choose to take advantage of it.

36% of businesses that sell products in a non-essential’s category reported seeing increased sales. 70% of these businesses appear to offer free or guaranteed shipping, which is helpful for consumers in this uncertain environment. Of the businesses in the non-essentials category that say their sales have increased, most have upgraded their supply chain efforts to cover the increased demand.

The data shows that the future may not be as bleak as we thought. Before making the difficult decision to let people go, consider working with Tech Recipes, the only partner with brand, agency and publisher expertise that can expose the control and programmatic transparency marketers need.  

  1. Re-evaluate your technology: Are all partners necessary? Does this give you a chance to cut costs?

  2. Renegotiate contracts: Requests to change or to get out of existing obligations, even if it’s just for the time being

  3. Reduce or remove joint business partner (JBPs) relationships - marketers are normally required to spend with their “strategic partners” – now is the time to be flexible

  4. Consider replacing costly agency relationships with low cost expert contractors

  5. Explore supply chain complements like Capacity that can help optimize product fulfillment

  6. Analyze your reporting to the most granular data: You’re likely already missing 10-15% in value because of fraud, reseller inventory or bad URL selection

  7. Prioritize ad hoc requests: Are they actually needed? Any requests you make require resource/timing and time equates to costs


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