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Brand values fail to entice inflation-worried consumers

The news: Purpose-driven ads, such as Dove’s “Reverse Selfie” campaign and Chipotle’s ”Can a Burrito Change the World?”, underperform in comparison to other ads, per a March study by GfK and the Goodvertising Agency.

  • Traditional ads had an almost 10% higher chance of grabbing the attention of a viewer than a purpose-driven ad.
  • Purpose-driven marketing attracts a socially conscious consumer, but such messages may not resonate as much during economic downturns.

Value over values: Commitment to brand ethos and purpose is taking a back seat as consumers prioritize lower prices.

  • Consumers are switching brands and retailers at higher rates than in 2020 and 2021 in order to seek out lower prices as inflation rages on, per McKinsey, which added that brand purpose was now less of a buying factor for consumers compared with 2020.
  • Nine in 10 consumers who reported switching brands or retailers stated they will incorporate the new behaviors into their everyday routines.
  • Consumers across the globe are de-emphasizing social values when it comes to spending habits—over half (54%) of UK online respondents stated they would actively switch to a cheaper brand at the expense of social or environmental ethos, per Lucid.

The big takeaway: As players across the advertising industry experience setbacks and cut ad sales jobs in the uncertain economy, it is vital for brands to showcase a product’s value proposition within mainstream ads.

  • In the current climate, brands can focus less on purpose-driven ads, as consumers prioritize lower prices in a time of inflation.