AMENIA, NY — Marketing departments are positioning themselves to weather expected economic turbulence by investing more heavily in data assets that provide value beyond traditional advertising campaigns.
“The data budget will probably not eclipse the advertising budget, but it will grow much faster,” Lou Paskalis, founder and chief executive of AJL Advisory, told Beet.TV contributor David Kaplan at the Beet Retreat Berkshires 2025.
This investment shift reflects marketing’s unique access to consumer data sets that don’t exist elsewhere in the enterprise, creating opportunities to justify spending even as broader advertising budgets face expected cuts during an anticipated recession.
Data as enterprise insurance
Marketing;s traditional attribution challenges have made advertising budgets vulnerable during economic downturns. Unlike capital improvements with multi-year gestation periods, advertising spend is viewed as immediately fungible, making it an easy target for cost reduction.
However, Paskalis argues that data investments offer different value propositions that extend beyond marketing effectiveness. “Marketing can bring in data that will enhance the enterprise solution that goes well beyond marketing, then that is a clear and present value and that will compete well for scarce resources separately and independently,” he said.
The strategy requires marketers to seek partners with what Paskalis calls “high value data, that is well permissioned and has what we call good provenance on it.” This includes understanding how data was collected and whether consumer privacy intentions were properly respected.
Privacy by design versus compliance
The approach to data investment varies significantly based on organizational philosophy around privacy and customer treatment. Paskalis distinguishes between two frameworks that will determine long-term data strategy success.
“Privacy by design” represents what he considers the durable standard, where companies build all systems to reflect their values about customer treatment. “How you treat your customers in a retail environment should be the exact same way that you treat them in a digital environment,” Paskalis said.
The alternative “compliance by design” approach focuses on meeting current regulatory requirements but becomes outdated whenever laws change. “The minute one of those laws changes, the minute a new state enacts a regulation that doesn’t exist before, that needs to be updated, it’s outdated and it causes a lot of pain and heartache,” Paskalis said.
Little shop of brand safety horrors
Paskalis, who has been committed to developing reasonable brand safety initiatives since he managed brand marketing for companies like Bank of America in the mid-2000s, has grown increasingly concerned that the movement has expanded beyond logical boundaries to damage advertiser effectiveness and journalism funding.
The original brand safety mandate was narrower. Then, it was focused on avoiding “unsavory adjacencies” like horrific terrorist videos on YouTube or airplane crash coverage. “Well, like Seymore in Little Shop of Horrors, the Venus Fly Trap that eventually got so big, it ate its owner, brand safety has grown into this many headed hydra and it’s expanded its scope beyond all logic,” Paskalis said.
The most problematic development has been categorizing news as inherently unsafe. This shift occurred after the George Floyd incident when corporate communications departments advised temporary news avoidance that “metastasized” into permanent policies.
The news audience value prop
Research data contradicts common assumptions about finding equivalent audiences outside news environments. A Stagwell study on 50,000 U.S. adults found that 11% consume only news when engaging with any media, representing an audience that cannot be reached through other channels.
“The single biggest driver of any campaign success is unduplicated reach,” Paskalis said. “So if I reach 11% more people by buying news, and generally the socioeconomic status of people who read news is they take more vacations abroad, have higher household income, more likely to drive a late model luxury car, all the things that are indicative of people who buy stuff, right?”
The audience quality extends beyond reach to engagement and purchasing power, making news avoidance particularly costly from a business perspective.
Moving toward brand suitability
The solution involves shifting from categorical blocking to values-based evaluation of media partners. Brand suitability asks whether potential partners align with company values around privacy consent, truth, and customer experience quality rather than avoiding entire content verticals.
Current brand safety practices manifest in three problematic ways: category blocking of entire news verticals, domain blocking of specific publishers like The New York Times, and keyword blocking without context consideration.
Keyword blocking presents particular challenges because lists remain unaudited for years. “Hillary Clinton was controversial in 2015 or 2016. Now she’s a grandmother living in Scarsdale. Why is she still in your keyword list?” Paskalis said.
Recession resilience is still possible
With recession worries hovering over brands’ budget allocation planning in Q3, Paskalis anticipates advertising budgets will face pressure while data investments remain protected due to their broader enterprise value. This dynamic could accelerate the shift toward data-centric marketing approaches that demonstrate clear business impact.
“As you know, it is very likely that we are going to experience a recession next year,” Paskalis said. “And as you know, the advertising industry then generally self-inflicts and makes it worse by pulling back more than it should.”
The fungible nature of advertising budgets compared to capital improvements makes them vulnerable during economic downturns, but data investments that support enterprise-wide objectives may prove more recession-resistant.
“Ad-supported journalism is the lifeblood of truth and there’s no denying that today there is a war on truth and facts are now fungible,” Paskalis noted. “Unfortunately, platforms allow that to happen.”
