May 1, 2020
Remember when we lived in ‘precedented’ times? It’s hard to fathom just how quickly all of our lives have been disrupted. At a time of such uncertainty, one thing seems pretty sure, the UK and other leading economies are headed towards a deep recession. And while it is true that we will not have experienced anything quite like the pandemic-induced recession that is coming, we do have evidence from the past that shows us how to respond in times of economic downturn. We also know that a recovery will come, and it’s vital that brands plan for how they can emerge stronger and quicker.
Right now, many businesses are cutting their marketing and advertising budgets and it’s perhaps inevitable that marketing investment will reduce even further in the coming months. But unless companies are saving cash to simply survive, cutting marketing spend has been proven to be a high-risk strategy, likely to lead to a significant fall in market share. This isn’t a subjective opinion; it’s based on nearly 100 years of robust evidence gathered from every economic downturn from the Great Depression of the 1920s to the Global Financial Crisis of 2008 when the strongest brands recovered nine times faster.
Rather than retreating, skilled marketers and ambitious businesses are planning brand-building activity which history shows is more likely to see them grow their market share. Brands who continue to invest in their share of voice (SOV) when others reduce their marketing spend will emerge healthier and stronger. Indeed, the brands which recover the quickest and emerge the strongest will be the bold few who invest and achieve an Excess Share of Voice (ESOV) by maintaining or even increasing their investment in marketing.
Drawing from established marketing theory, here are some principles on how brands should approach marketing in a recession:
Don’t panic and reduce your investment in marketing. Defend your share of voice, unless the short-term survival of the business depends on it.
Resist the pressure to switch marketing spend from brand solely to online, sales activation and promotional tactics – it makes little sense to do so, even in the short term. Those activities do not lead to long-term profitability and customers, in many cases are not reluctant to buy, they are unable to buy.
Take advantage of cheaper media. It will build your share of voice to drive growth in recovery.
Be creative. Create things that get noticed; otherwise, you’re wasting a budget you fought hard to protect.
Measure what matters. Work hard to understand and optimise what is driving growth and profits. Last click attribution models and number of impressions do not equal profit.
Not everyone will heed this advice or be able to act on it. That’s precisely why it will happen again. This is when marketers have to stand up and be counted. Now more than ever, those brands who understand that marketing is an investment, will perform better than those who treat marketing as a disposable cost. You may have to work hard to convince owners, finance directors, boards and shareholders that this is the right approach. But this is not a high-risk, or brave strategy. History has shown us that now, the sensible decision is to hold your nerve, be ambitious, and when your competitors are cutting back and going quiet, be disruptive, get noticed and make yourself heard. To do anything else is risky business.
Drummond Central is a creative agency that helps like-minded businesses solve their problems and realise their ambitions.
The IPA (Institute of Practitioners in Advertising) is widely recognised as the world’s most influential professional body for practitioners in advertising and marketing communications.
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