How Brand Marketers Should Respond to Supply Chain Uncertainty

November 23, 2021

Amid the health crisis, marketers have had to navigate evolving situations with the supply chain that have created a trickle-down effect. Uncertainty about product inventory has forced constant adaption so that marketing plans accurately reflect what consumers actually buy.

It's a stressful proposition, and the tightrope walk is exacerbated amid the rush of Q4. Normally, this is a time when brands are spending heavily on media to drive holiday sales. At the same time, because it's the end of the year, CMOs must spend their budget, or else they risk a lower allocation next year.

One problem contributes to the other: the supply chain is creating questions about inventory, forcing some advertisers to cut spending by as much as 50 percent, according to Business Insider. These marketers still need a place to put that leftover budget, preferably somewhere that will contribute to the bottom line.

CMOs in retail, auto, CPG and other verticals are kept up at night wrestling with this conundrum. Fortunately, they have plenty of opportunities to put that budget to work, even in the condensed timeline of Q4.

Examine media channels

Much of the time, Q4 spending happens in a fury. Channels are identified, budget is spent to drive sales, rinse, repeat. Marketers who are potentially dealing with inventory issues this quarter have an opportunity to look at how their advertising is actually working across channels.

Where in the past Q4 may have been about maximizing the channels that drive sales and conversions, this year may represent an opportunity to divert spend to channels that drive awareness and engagement. These metrics can have a positive impact in 2022 once supply chain issues are resolved.

This changes the goals that many marketers are used to at the end of the year and forces them to get outside of their comfort zone. But adjusting how they measure success now will be beneficial in the long run.

For example, the auto industry is dealing with low inventory due to product shortages and a slower supply chain. Manufacturers will still roll out new models next year, of course, so this quarter represents an opportunity to refine channel strategies, building unique approaches to keep current buyers content while they await delivery — or prime audiences for purchase in the coming year.

Find a new approach to messaging

Shifting to engagement will likely require some adjustments to creative. If inventory issues are a concern, then a CTA that drives customers to a store, e-commerce shop or dealership isn't always useful. Telling someone to go out and look for a product that isn't on shelves is damaging to the brand's reputation.

Changing the call-to-action across a campaign may feel like a massive undertaking, but it's also an opportunity to go deeper from an experiential standpoint. Use CTAs that deepen the relationship. Drive audiences to a website where they can sign up for inventory updates. Allow them to learn more about products that are in stock, and potentially offer a discount on products that are backordered when they buy two products together. Let them follow social accounts that are full of compelling creative, so that they still think about the products.

All these options keep potential customers engaged, and they're also an opportunity to learn even more about these audience. It's an easy way to grow customer intelligence, which will impact future media and creative strategies, even if the supply chain crisis continues into early 2022.

Invest in data strategy

Data strategy can be the most advantageous place to divert spend. In a use-it or lose-it budgeting environment, CMOs cutting back on media should be investing as much as they can on data, so that they hit the ground running once the supply crisis is over.

There are a lot of ways to do this. When shifting to a longer-term engagement strategy, investments need to be made in first-party data assets. Some brands may find that they have very limited first-party CRM logs and building out this asset right now will pay off well past Q4 2021.

Meanwhile, there's the simple fact that there are big changes afoot in how brands will be able to gather and use data for ad targeting in the very near future, and Q4 represents a chance to build a future-facing data plan before it's too late.

Finally, if a brand follows the above advice and shifts to engagement-heavy strategy, measurement and analytics play a much more important role, regardless of industry vertical or media channel. If marketers want to maximize metrics beyond conversions, it helps to have robust measurement capabilities in place so that one can see how audience perceptions and composition shift over time.

Seize the opportunity

Even though the global supply chain is in crisis, there's no need for marketers to panic when it comes to their Q4 plans. Inventory shortages are problems, but they're not going to kill brands forever. This is an opportunity to examine strategies from a more holistic perspective, understanding where marketing dollars go, how those increase certain metrics, and how those investments pan out in the long term.

Bold brands can use this time to experiment with new metrics, build up their data assets, and deepen their relationships with consumers so that they come out the other side ready to roll.

The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Brent Pero is the chief revenue officer at Alliant.

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