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How supply chain issues and inflation have started to reshape advertising

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The person passes a large outdoor advertisement for the Apple iPhone 13 Pro on April 11, 2022 in Wuhan, Hubei province, China.

Some brands are shifting away from product-focused advertising as supply chain issues make it harder to get goods. Getty Images

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The constant kinks in the supply chain coupled with inflation that refuses to abate cause plenty of headaches for both companies and consumers. The effects have rippled to marketing, where plenty of brands have had to struggle with pitching goods that are either snarled in transit or cost a lot more than they used to.

On this morning’s Economic Pulse, “Marketplace Morning Report” host David Brancaccio spoke to Jeanine Poggi, editor at Ad Age, about what brands are doing to adjust their advertising to these new economic conditions. Below is an edited transcript of the conversation.

David Brancaccio: You know, we pour it like ketchup on almost everything we say these days: the supply chain and its problems. But what that really means, supply chain, is companies may not have the stuff to sell that they would like to sell, when they want to sell it. And it hadn’t occurred to me: if you’re advertising, this is an issue.

Jeanine Poggi: Yeah look, I mean, during the holidays, in particular, you really saw brands struggle with this. So you know, really one of the major things that the ad world has sort of been thinking about, and grappling with, is the messaging that they’re putting out there. You know, messaging around specific products versus brand messaging, which is always the shift and the balance that brands are looking to do. And right now, you really see brands lean more into the general, “Here’s what our brand is about,” versus like, “Here’s a specific product.” Especially if there are issues in the auto sector in particular, around specific parts and things like that.

Brancaccio: The other thing that we’re all dealing with, but also if you’re trying to sell stuff, is inflation and having to kind of explain yourself if it’s going to cost more.

Poggi: And that’s an interesting one. You know first off, right now, it seems that consumers are demonstrating a tolerance for higher prices. I think the big thing is being transparent and brands looking at communicating those price increases. But then when you come to it, the actual advertising and marketing around products, despite inflation, despite supply chain issues, the overarching opinion is that brands should continue to advertise. Because the last thing a Coca-Cola wants is to pull back its advertising spend, and then persuade customers to potentially trade down to lower-priced competitors.

Brancaccio: And then some clever devils that you keep an eye on use inflation to their advantage. They’re like, “During these high price times, why not buy our cheap thing?”

Poggi: Yeah, you know, there’s an opportunity to really come in and I think also present a value proposition. So maybe it’s not about the price in general, but saying why your product offers more, why there is more value in the price that you are paying. I think that’s probably the other way that brands are really approaching this: thinking of the mix of price increases around with strategies of saying like, “How do we increase the value for the consumer?”

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