In times of economic prosperity, business success comes relatively easily. Consumer confidence fuels natural market growth, and customers queue at the door. But it’s easy to forget that all economies are cyclical, and just like death and taxes, recessions are inevitable.
In recent days, the Bank of England and their global counterparts are openly using the ‘R’ word, gloomily predicting a long, deep economic depression.
During these uncertain times, business leaders scrabble for savings, and the marketing budget is often the first victim. The commercial pressures to drive sales through any-means-necessary, sees marketing departments switching tack, with long term brand strategy giving way to short-term tactical activity.
In their seminal piece of research, ‘Marketing in the Era of Accountability’, Les Binet and Peter Field set out to identify which media strategies performed the most effectively at driving business effects such as profit growth and market share increases.
Binet and Field research found that although trimming marketing budgets can help protect short-term profits, it leads to significantly weaker brand resilience once the recession ends. Brands that take the completely opposite approach, actively increasing their marketing spend, especially around brand strategy, go on to gain a larger market share when confidence returns.
This is especially true perhaps of challenger brands. The crash of 2008 was a horrendous experience for traditional financial sectors, but the emergence of hip tech brands like Facebook and Google owe their success in no small part to investing so heavily in their brand during the turbulent years that followed.
The other big consideration for brand and marketing teams must be value. During times of prosperity and deep pockets, large corporate agencies draw all the attention. Big budgets fuel extravagant integrated campaigns and expectations can be more relaxed. But when times get tough, canny brands expect more bang for their buck. By reaching out to smaller independents, they often receive exactly the same levels of strategic and creative thinking, but delivered at a fraction of the cost.
Although expensive TV production and prime-location OOH may no longer be viable, new alternatives are always presenting themselves. The ascent of digital media, social platforms and the role of influencers provides new and inventive ways to deliver hyper-targeted campaigns to audiences, even on a tight budget.
Cutting marketing budgets also cuts a vital connection with audiences and customers. Brands do so at their peril, because when those stormy economic clouds eventually lift, no brand wants to find themselves forgotten or discarded.
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