There’s no denying the current financial market has got people worried.
Talk of economic downturn alongside rising living costs is fuelling fears of a recession, which naturally leads to caution and pessimism. In contrast to the prevailing optimism as we initially emerged from the pandemic, knee-jerk reactions can result in spending cuts and postponement of growth plans, often to the further detriment of the overall economic picture.
This has been exacerbated by recent news of the Government’s plans to launch a campaign asking businesses to cut their prices to customers, using ‘money they would otherwise spend on marketing’.
While the campaign detail has yet to be revealed, the comments from the new cost of living tsar, David Buttress, have already sparked considerable debate.
Encouragingly, business reaction seems to largely reject the notion that marketing should take the budgetary hit, serving instead to highlight the value of promotional activity – and particularly during a downturn.
And while we agree that marketing shouldn’t be the sacrificial lamb here, it is always worth reviewing marketing spend to make sure it’s being targeted wisely.
Mark McDonagh, EBY Client Services Director, said:
“The Government advice is unhelpful and ill-advised as it completely overlooks how integral marketing activity is to the success of most companies. However, reviewing marketing spend and interrogating its return, effectiveness and overall value to the business is something we’d always advise companies to do.”
The importance of marketing in a recession
No matter what is happening in the economy, or what your customers are doing, it’s important to stay in touch with them, so they know you’re ready and waiting for their return.
You might need to reposition your services or offering, and promotion will be at the heart of this. As IPA director general, Paul Bainsfair recently said: “With forty years of downturn data to learn from, the IPA knows beyond doubt that brands do best when they maintain their investment in longer-term brand-building media, complemented by a smaller ratio of sales activation media. This is the survival code for surviving a downturn.”
Figures from the Advertising Association show the UK ad market reached a record £31.9bn in 2021 and is forecasted to grow another 10.7% in 2022 to £35.3bn. While advertising is only one element of marketing investment, this is indicative of the industry, with every £1 spent on advertising generating £6.
At EBY we’ve experienced almost 75% year-on-year growth since the start of 2022 as businesses have continued to make dramatic shifts towards digital in response to the pandemic, demonstrating how additional spend can be central to helping a venture not only survive, but prosper, during difficult times.
But yes, you absolutely need to make sure you’re getting the most from your marketing money. Here are some points to consider to help you achieve this.
Be flexible in your marketing
While the pandemic was a terrible and challenging time, it’s forced companies to look at their business models, their resilience and how future-proof they are.
We’ve all had to become more flexible in our approach and that includes flexibility in marketing, which is something we have written about previously.
Marketing strategies need to have flexibility built in, allowing businesses to adapt, or shift direction in response to market forces (or global pandemics).
This could identify different levels of plans, ready to be scaled up or down as needed and the early identification of risks to your business that would result in a marketing activity shift.
Checking in with your customer base
The beauty of digital marketing in particular is that you can easily monitor and evaluate its success, so it’s worth reviewing regularly. For example, are you still targeting activity which is showing a reduction in performance? Are your customers the same or has your customer base changed due to changing demands?
Clear marketing briefs
On a similar note, you need to have clear evaluation criteria in place to check how your marketing activities are performing and decide if anything needs switching up. A recent report from BetterBriefs revealed UK marketers estimate 26% of their marketing budget is wasted on poor briefs and misdirected work.
Make sure your marketing is still aligned with your business goals
Ultimately, marketing should exist purely to help you achieve your business’s goals. If you’ve had to redefine business goals due to financial constraints, make sure your marketing targets are equally redefined. There’s no point paying for something that is no longer bringing you business because it’s not delivering results.
How EBY can help
Rather than cutting your marketing budget, it can be more beneficial to review the activities you’re paying for and ensure every pound is working hard to generate business, especially in an economic downturn.
Is your agency still a good fit? Do you need to outsource marketing for a second opinion or a more strategic approach? An agency like EBY can help. We call upon our 20 years of experience to deliver a high-quality marketing service at a more affordable price.
If you’d like to speak to someone about your business challenges and marketing strategy, then please get in touch to arrange a call