ChatGPT To Media Planners: Reduce Ad Spending In A Recession

by Joe Mandese , January 30, 2023

While macroeconomic indicators remain reasonably healthy and most industry forecasters are not projecting a recession, much less another advertising one, the outlook is unstable enough that at least one major agency holding company executive has been turning to a third-party for advice on what his clients should be doing in the event of one. And its answer isn't good for the ad economy.

"I keep asking ChatGPT what my clients should do in the event of a recession and it keeps telling me the answer is all lower funnel stuff, not advertising," the executive said, referring to the text-based generative AI answer machine that has become a popular source for some in the ad industry to play with, if not actually plan with.

In fact, when MediaPost tried replicating the executive's query, ChatGPT kept returning the same answer: "reducing advertising" and replacing it with performance-based promotions likely to generate traffic, conversions and sales, albeit at the potential risk of long-term brand equity -- and potentially, market share.

The most interesting insights here are not ChatGPT's answers, but that top media-buying executives are asking it what to do in the event of a recession.

ad spending, advertising, chatbots, economy, forecast, media buying, media planning, performance marketing, technology

3 comments about "ChatGPT To Media Planners: Reduce Ad Spending In A Recession".

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Jack Wakshlag from Media Strategy, Research & Analytics, January 30, 2023 at 2 p.m.
Also the other interesting insight is that no authority has spoken up as to whether this is what any brand should actually do. Is nobody in a position of authority willing to support or dispute the veracity of the answer?
Reply

Tony Jarvis from Olympic Media Consultancy, January 30, 2023 at 2:50 p.m.

Dr. Leslie Wood (until recently with NCS!) and Les Binet, Group Head of Effectiveness at adam&eve DDB in the UK would I believe refute this conclusion. Brand building through advertising, exquisite product quality and value plus "real" customer service should never stop. Short term lower funnel promotional efforts can often destroy brand equity, the true value of a brand. Trust I got that right?

Ed Papazian from Media Dynamics Inc, January 30, 2023 at 3:59 p.m.

Since when did client CMOs ask agency media buyers ---or planners--- whether to increase or decrease ad spending during a recession?Such discussions are invariably held between senior agency acccount management or the top brass with their counterparts at the client---but rarely is an agency recommending standing pat ---or an increase ---equipped to prove its obviously self serving case to a skeptical advertiser. It all depends on each brand's situation within its product category as well as a host of other variables----there are no acceptable one size fits all answers---which is all you are going to get if you ask ChatGBT this question. What's next---are we going to ask ChatGPT what's the correct frequency per month? Or who are the prime targets for our proposed brand positioning strategy? Or, maybe, we'll ask ChatGPT to come up with the most effective copy and slogans for our campaigns.