Marketing Around The Table
QUESTION: During a recession are marketing budgets the first victim and where do you feel the financial axe should fall?
1
Jim Stewart
Google guru, StewArt Media
The last recession I had the pleasure of being a part of was the dotcom induced one. The first budgets to get cut back then were non-revenue producing ones, like content acquisition. Then of course the staff amenities budgets like the corporate billiard table and Formula One networked arcade gaming machines. Marketing budgets got cut when it became obvious for B2Bs that there was no one left to market to as their client base began to hit the wall or in the case of the non-revenue generating businesses, their funding dried up. Of course that was before we had Google, MySpace, Facebook, YouTube, Twitter et al.
Seven years on, the world is a very different place. The opportunities have never been greater to target your audience and build a list to market to. If the financial axe needs to fall anywhere, it should fall on the marketing campaigns with the highest cost of lead acquisition. Typically these are the offline campaigns where cost of acquisition is traditionally more difficult to calculate or extraordinarily high when compared to things like search marketing.
Marketing is being redefined online, as every piece of content that gets added to the web about your company is another marketing opportunity. Even bad press on a blog is still an opportunity to communicate directly with your audience and win new customers. So rather than cutting your marketing budgets, make them more accountable. Every page on your website is an opportunity to rank first in Google. There are plenty of people that want your products; you just need to get in front of them. Just because some people are having a recession doesn’t mean you have to.
2
Jennifer Wilson
principal, Lean Forward
Recession or no recession, marketing budgets need to focus on developing a conversation with consumers. Actually, in a recession, it is even more important that marketing is a two-way dialogue, not a one-way communication.
It can be easy to decide to cut marketing – which is about building reputation and relationships, in favour of advertising; however, consumers have a lot more choice in the messages they listen to, and are influenced primarily by their social peers, networks and influence groups and not by a 30-second spot (regardless of how clever). Choosing to tell people what they need/want rather than engaging them in conversation is a way of wasting good money – not smart in a recession.
Where should the financial axe fall?
- on paying so-called creative agencies that make their money by doing pretty print ads when the consumers are not paying attention to this medium
- on making clever 30-second ads for a waning TV audience and not considering that 30-second ads won’t work online or on mobile (go 15 or even 10), and
- on anyone who doesn’t get the importance of a single, unified relationship with a consumer across all the touch points where they may come across you.
What should you invest in? What costs the least – targeted marketing that knows where your consumers are and engages them there, testing out new things like location-based services, mobile, games, viral and teaser campaigns. And if your agency isn’t suggesting this to you, check to see if they still keep their digital division somewhere separate…
Your consumers want a great experience, more than great service or a great product. The axe should fall on anything that doesn’t deliver on this.
3
Brett Lowe
marketing director, Business Planning Works, an SME consultancy
Unfortunately, far too many proprietors handle the marketing aspect of their own business. Hence, they rarely achieve the genuine potential of any campaign and, as a result, when the powers that be indicate that we are in a recession, the marketing activities cease until the storm has passed. As consumers tighten their spending habits during a recession, however, they enter a self-imposed savings program, so in actual fact they have ‘more’ money to spend – if given strong enough reasons! These reasons will only be revealed via a clever marketing campaign provided the campaign harnesses the positive power of the recession as reasons to purchase.
This philosophy applies to all products and services and not just the basic necessities. Another positive factor behind marketing during a recession is that fewer businesses are targeting the consumer, giving the clever campaigns a greater share of the available sector. Restricting the marketing budget and/or marketing activities during a recession is like refusing to put fuel in the vehicle and expecting it to take you somewhere. From a pure commonsense perspective, the lack of consumer-spending is a major contributing factor for a recession, so by ceasing marketing activities the recession is further strengthened.
By the way, recessions rarely sneak up on us. They’re like Christmas – we get plenty of notice, so a clever business proprietor can prepare for it and undertake a proactive campaign accordingly. The recession is not the greatest challenge; it’s the fact that many SME proprietors have no ongoing marketing budget regardless of the economic state! Marketing is the first Key Result Quadrant for all healthy and profitable businesses, and should be managed by professionals, not proprietors, as they return more than the investment.
4
Joe Rogers
managing director of Elmwood Australia, an award-winning design consultancy
When I was a young(er) fella back in Canada I used to work for Coca-Cola during the summer because they were great about allowing me time off to pursue my deluded dream of playing soccer professionally. One summer I needed cash to pay for my new truck, so I took an extra job delivering pizzas at night on weekends. There was money to be made I told myself. I justified the purchase of my new ride with the explanation that it paid for itself because it was a working asset. What I failed to factor in was that I didn’t have the time to do it and was consistently late for work. As any good manager does, mine reminded me a few times that I started at five pm not 5.15. One night I didn’t show till seven. The axe fell.
My dream of being a delivery entrepreneur was over and I was asked to turn in my roof light. I ended up losing my truck too and had to downsize my expectations of what a uni student should have as ‘basic’ transportation.
The lesson I took from all of this and the parable for companies that fail in recession is: I was over extended and focused on what was coming in each month, not what was going out. So my advice in a pizza box is: in recession cut the crap that doesn’t add value and get back to basics. Do only what adds value to your customers now or in the foreseeable future and forget everything else. If the powers that be decide that this happens to be your marketing budget you only have yourself to blame.
5
Michael Burrows
sonic swami, Brand Music
During a recession there’s nothing like a fluffy bunny doing high energy aerobics or a cute beaver sitting at the beach to get you through the budget blues, but the reality is that a tighter rein on your marketing budget means that every dollar spent needs to be working harder than usual. The cute bunny may have to be put on to boil for a while.
While many of my advertising world peers would scream loudly that a recession is the perfect opportunity to gain market share through aggressive activity, the economic realities for most brands do not make this a viable option. Be aware that inactivity can be just as fatal for long-term brand awareness, as competitors will inevitably seize your gap, often making it impossible to own this place again. A marketing budget slash doesn’t have to mean death to the brand. It simply means that the broader branding or the big idea advertising should be replaced by communication that offers value to an audience seeking thrifty alternatives to the brand choices they would usually entertain in a different climate. This new marketing landscape offers an incredible opportunity to win new audiences and establish a relationship that is perceived as giving back in tough times.
Our experience on radio during cost cutting times has shown that the brands that have channelled their dollars away from big idea branding to more of a direct, call to action style message have had a great result, saved marketing dollars and maintained a loyal audience. Then as soon as the tightening loosens, be quick and send those energised rabbits back to emperor Nasi Goreng and make them dance hard.
It comes back to executives thinking that Marketing is a cost rather than an investment. This is an issue i'm sure most Marketers have to face every day. We just need to be more diligent in ensuring the money we are given is spent well (and monitored with the right metrics) and that we find ways to make that budget stretch further by improving operational efficiency.