The word that seems to be on every business executive’s lips as we start 2023 is “recession.” With multiple major macro factors at play, many financial forecasters are predicting a global recession, albeit some are still hedging their bets about how serious it will be. Seven out of 10 economists surveyed by the World Economic Forum consider a global recession at least somewhat likely.
And the word recession strikes fear into the heart of most savvy marketers since it conjures up images of budget cuts and resource freezes.
Market macro factors like inflation, labor shortages and geo-political blockers are impacting consumer behavior and spending. Any discerning business executive will be taking note, and one area of business spending that often receives additional scrutiny in volatile times like these is the marketing budget.
But, should marketing be first on the chopping block? During the last murmurings of recession at the beginning of the coronavirus pandemic, Kantar surveyed 25,000 people across 30 countries, and less than 8% said they thought brands should stop advertising.
There are several considerations that CMOs and agency executives need to think about before taking a knee-jerk reaction and scaling back marketing during a recession. Here is a handy list of questions to ask yourself, your team and your partners going into 2023.
Carefully assess your vendor relationships
No marketing team can go it completely alone. We know the martech and adtech landscapes are brimming with possible partnerships and it’s likely that a brand or agency team has a complex stack of vendors. Cost consolidation, rather than cost-cutting, can be an effective first step to cut some of the fat without impacting your marketing outcomes. Some questions that should be considered:
- Can I find a partner who does the job of two or more? Rather than using point solutions for every marketing channel and capability, by seeking a full-service partnership through one vendor, you can likely simplify and streamline your spending.
- What level of people resourcing will I receive from this partner? Great technology is great, but nothing can replace proper service levels that you can rely on. Think about what talent gaps you have within your organization and seek a partnership that can help supplement those. A partner who can fill in these skills gaps and showcase accolades and awards for their service will be worth their weight in gold during internal hiring freezes.
- What are my payment terms with this partner? In hard times, cash is king so it’s important to have partners who you can trust and payment terms that work for your business.
It’s time to rethink recession marketing. Discover how the right media strategy can ensure your desired outcomes are met and prove ROI, even during economic uncertainty.
Get serious about using a data-driven approach
Justifying marketing spend is simply not possible without an effective measurement and optimization framework in place. Some questions to ask yourself and your team this year will be:
- Will our measurement framework survive when cookies go away? With 2023 being the last year that cookies are available for measurement and targeting, it’s important to take this remaining time for testing future-proofed options in a risk-free way, so that you can head into the cookieless future with certainty.
- Is our short-term measurement based on real business outcomes, or simply proxy metrics? True success for most businesses is likely not simply ad clicks. Take some time as a team or tap into expert data partners to test and discover the ideal custom KPI to help you move the needle.
- Are our leading indicators sufficient enough to support a long term strategy? Brand goals are still important for marketing during a recession.Arguably more important, since consumers want to spend their precious money with brands they trust. But it can be the hardest part of the marketing budget to justify when brand building takes place over a longer time period. By incorporating really robust leading indicators of brand favorability, like uplift in attention or brand recall, you can be sure your spending is still on the right track.
Think carefully about where to place your bets
Consumer attention is shifting rapidly across channels. Thinking carefully about your omnichannel approach can help make the most of your marketing spend during a recession.
- How can I get the impact of TV without the waste? TV is known to be the king of brand marketing, but a mass-reach linear TV campaign may be out of your budgetary reach in the near term. The good news is, data-driven, targeted TV that is still brand safe is now easy to access. In 2022, at MiQ we saw a 105% increase in spending on CTV with excellent results in driving measurable outcomes.
- Is social media right for my brand? Many social platforms are in varying states of disarray right now. Brand safety issues pervade and frequency is through the roof, which is the last thing you want when trying to build consumer trust. And in our recent report, Unboxing the Global Retail Consumer, we saw that 7 in 10 consumers are taking a more considered, less click-happy approach to purchasing. This may justify a reduced social media spend in 2023, which could be better allocated to those CTV ads I just mentioned.
- How can I reduce the risk involved in my advertising strategy? In the end, all you want is to ensure you can reach your marketing goals in an efficient way. By working with partners who can help you identify your ideal outcome and use data to achieve it with a channel and platform-agnostic approach, you can protect your brand and your budget.
The future is not all doom and gloom for marketers, even if we do enter a global recession. In my next blog post blogs, we’ll look at how marketing professionals can adjust their strategy in 2023 to ensure desired marketing outcomes are met to drive continued growth.