Five Reasons Why Brands Should Increase Their Marketing Spend In A Downturn
Tim Beard is the managing director for APAC at Silverbullet, with over 25 years’ experience helping organisations implement and manage digital technologies. In this piece, he explains why now is the perfect time for brands to increase their marketing spend.
There’s been a lot of debate recently as to whether it’s counter-intuitive to boost marketing spend in the current climate. In this article, we break down the clear points of evidence showing those brands which do invest wisely, actually increase their market share, and come out ahead of those who contract spending.
The topline reasons for this are logical – consumers still seek information from the brands they trust in times of economic uncertainty and recession. Those brands who fill the ‘communication void’ will inevitably enjoy an increased share of voice in the hearts and minds of consumers. It’s also important to keep in mind that activity will eventually ramp up again, and brands can either be on the front foot for this and hit the ground running, or play a game of catch-up that could damage short and long-term profitability.
Any period of reduced customer activity is also the perfect ‘downtime’ to address internal CX and UX bottlenecks or pain points, and find ways to optimise the customer journey, reduce bounce rates and increase conversions.
1. Recession spending increases brand share of voice
Multiple studies are doing the rounds at the moment, but the upshot is, companies increasing ad spend by up to 20% in a recession saw an average share gain of 0.5%, and those that increased beyond the 20% threshold recorded average gains of 0.9%.
From a media-efficiency standpoint this is a once in a lifetime opportunity to drive brand awareness quickly and at scale. Globally, we’ve seen video CPMs down 40%, display CPMs down 55%, and native CPM’s down 30%, as many marketers lose courage and reduce spend, it gives marketers with the wherewithal a never-to-be-repeated opportunity to make their mark.
Brands need to be resilient and consumers want reassurance normality is on the way back.
And if you think you can just turn the tap on when the economy returns, we’re seeing retailers globally gearing up for the mother of all sales as retail stores are able to trade again. They have a backlog of stock they need to shift through their supply chain, and those sales are going to need (and get) vast amounts of media support very quickly. So don’t wait. The time is now.
A further example of how this can affect the long-term bottom line is the example of Kellogg and Post in the Great Depression. Never heard of Post? This is why: The cereal makers used different approaches to advertising spend in the 1930s. Post reduced its spending, while Kellogg doubled its spending. The result? By 1933, Kellogg’s profits had risen almost 30% and became the industry’s dominant player, and Post folded.
2. Be where customers are
Customers haven’t disappeared. In fact, it could be argued they are more active than ever, just on different sites. IAB Australia reports a 71% increase in time spent on online food and cooking websites, and Australians aged 13-24 increased their time spent online with food and cooking content by 144% in March.
Sunday March 29, 2020, recorded the highest daily time spent consuming food and cooking content in 2020, with a combined total of 63,555 hours spent on food and cooking websites. Data also showed that on the last weekend of March, Australians spent 71% more time consuming food and cooking content online when compared to the last weekend of February. This is a lot more time compared to pre-COVID time periods, so investing in these channels is a great way to increase share of voice at this time.
3. Keep your existing customers
Most marketers now understand it is cheaper to keep an existing customer than to find a new one. Now is the time to double down on your customer loyalty with a dedicated program, customer feedback initiatives, and leveraging your data to power personalised and high-impact experiences.
Gartner US reports 80% of growth organisations use customer surveys to collect customer experience data, compared with just 58% of non-growth organisations, and 43% of product managers at growth companies are using analytics to collect and analyse customer perception and sentiment data. This is compared with just 22% of product managers at non-growth companies.
Gathering, analysing and acting on customer feedback is the best and most effective way of keeping those customers, and you may even get a word of mouth benefit from it as well.
4. Get your mobile site in order
Reduced customer interactions can create bandwidth increases for those projects you always wanted to get to but never had the time to do. A key one of these is getting the user experience for your mobile site in order.
Why? Last year Merkle found mobile devices generated more than 60% of organic site visits. Slow sites that aren’t optimised for mobile result in high bounces rates, so while traffic is slightly down is a perfect time to streamline that interface, because none of us can afford to lose customers to slow load speeds right now, and organic traffic is key to growth.
5. Get to that AI project
Incorporating artificial intelligence and/or machine learning into your CDP or DMP is one of those projects which often get left in the ‘too hard’ basket in peak times.
Much like ensuring mobile site optimisation, now is the time to invest in these projects to ensure a brand is in the best possible position to serve customer needs. Why? According to Forbes US, 40% of marketing and sales teams say data science encompassing artificial intelligence and machine learning is critical to their success as a department.
Let’s face it, this kind of tech for insights is not going away, so using this time constructively to get on top of it is a strategic, smart business move for now, and in the months ahead.
Latest News
DMARGE Founder Unveils Creator-Led Social Media Agency Feedstar
New creator-led social media agency Feedstar to be aimed directly at Gen Zs. Well, they'd hardly want print, would they?
TV Ratings (02/05/2024): A total of 1,753,000 Aussies Witness Port Adelaide’s Defeat
Seven's AFL numbers almost double that of the NRL last night. The NRL still easily winning for ruptured ACLs.
Hotglue Cashes In With La Trobe Financial Digital Media Account
Hotglue staffers learning their cashflows from their collaterals today after nabbing La Trobe Financial's digital media.
M&C Saatchi’s Sydney Creative Lead Exits
B&T's stopping short of calling it a revolving door at M&C at the present, but there's definitely heat on the hinges.
Taylor Swift’s Music Re-Enters TikTok As Universal Pens Landmark Deal
Yes, B&T may have spent 152 hours failing to get Taylor Swift tickets, but, as you'll read here, it's all behind us now.
HAVAS Red launches inaugural Influencer White Paper
Havas Red has debuted its first influencer white paper. Unless you print it out in colour, of course.
Two Sides Global Campaign Reports Increasing Greenwashing As Organisations Focus On Sustainability
New report confirms greenwashing's on the rise. Apparently Mars' 'work, rest & play' claims also under investigation.
Aruga Launches New HQ & Changed Ownership Structure
PR agency Aruga proves Brisbane is 'so hot right now'. So hot in fact, Adelaide's had to go on anti-anxiety meds.
Delicious & American Express Partner To Launch Month Out 2024 In Sydney
Cost of living got you eating noodles prepared in the two-minute style? Why not live vicariously through this.
Aussie Ad Market Continues Decline In March
The belt-tightening in adland shows signs of a turnaround soon. Bar the belt-loosening at the all-you-can-eat buffet.
VMA Focuses On Skills And Training For Members
If there was a post-COVID hangover (bar the anti-vax ranters) it was the rise in skills shortages. Here's another one.
Nearly 90% Of Consumers Want Transparency About AI Images, Finds Getty Images Report
Study finds consumers want transparency around AI images. Couldn't care less about photoshopped magazine covers.
The National Breast Cancer Foundation Partners With VML To Boost Funds
Anyone else feel we've exhausted the office morning tea for cancer? B&T proposes the office moonshine still instead.
Perry ‘Pez’ Lazaris Named New National Hit Network Announcer
Why is it mandatory for the media to only publish the nicknames of people in radio & underworld crime figures?
Before Adland: Garry Dawson’s Journey From Teacher To Marketer
Here, the Hopeful Monsters marketer talks his shift from the classroom to the room wherever marketers congregate.
Scott Cam Urges Tradies To Prioritise Sun Protection
The Block host promoting sun protection to tradies. Also, don't try getting into the RSL after 6pm wearing high viz.
PubMatic Study: Advertising On Retail Media Is 50% More Effective Than Social Media
New study finds retail media 50% more effective than social. B&T says two-for-one Tim Tams trumps the lot.
From MOWING to life GROWING: Jim Penman launches ‘Life Coaching’ services
Can't decide on getting the hedges trimmed or finding a deeper meaning to life? You're in luck with this new venture.
Budweiser Brazil Turns Songs That Name Drop The Iconic Brand Into Spotify Ads
It's strange that Budweiser never found a market among beer-swilling Aussies. Then again, neither did the fluffy duck.
Effie Worldwide Strengthens Board With 6 New Members
B&T hopes everyone's wearing their Maseur sandals at the Effies, as it's standing room only at the next board meeting.
Special Enlist A Penguin Named Nigel In Latest Energy Campaign For Contact
Special unveils Nigel the penguin in work for energy provider Contact. Apparently Percy the peacock was booked.
Anya Taylor-Joy, Chris Hemsworth & George Miller Ignite Sydney For Epic Mad Max Launch
The Mad Max film franchise is Australia's cinematic gift to the world. That & Chris Hemsworth's near perfect cheekbones.
IAS Launches First-To-Market Integration With Roblox To Provide 3D Immersive Measurement
Always thought you could do with better 3D immersive measurement? Happy days are ahead here.
Fast And Furious: Top Gear Australia Launch Thrilled Motorheads, Car Entusiasts And Guests
B&T is still no closer to knowing who the new Stig is, except that she is a woman and a ridiculously fast.
TV Ratings (02/05/2024): Seven’s The 1% Club Wins The Night
The 1% club did not live up to its name when it comes to TV ratings last night.
TRA Welcomes Raft Of New Hires; Bolstering Expertise Across Markets
Insights and research agency TRA announces slew of new hires. Still no news on the return of marble wash denim, however.
CX Lavender Hires Boston Consulting Group’s Kim Verbrugghe as Chief Strategy Officer
CX Lavender announces new strategy hire and channels 'acoustic folk act at local RSL' for the publicity pic.
Opinion: Community standards, will they be the death of us?
This columnist is talking community standards. Sadly not those people who put dogs in trolleys in supermarkets.
Tegel gets heads bobbing with new free-range chicken platform
Sure, there's a lot of moral considerations when buying a chook. Yet, not as baffling as buying eggs or canned tuna.
Study: 66% of Aussie men believe masculinity is under attack
Two-thirds of Aussie blokes say masculinity's under attack. That said, sales of Solo lemon drink appear robust.
‘Equal Writes’: Canyon reveals new campaign and refreshed brand for women and non-binary writers
As this brand redesign again proves, nothing beats black on white. Well, white on black in this instance.
Icon Agency bolsters consumer and integrated offer with major hires
Icon Agency unveils new recruits. As press photo confirms office moustache competition now a lay-down misère.
Clemenger launches agricultural graduate program
Has Farmer Wants A Wife triggered an interest in dagging & hay balers? This grads program may resonate.
Levi’s Appoint UM As Global Media Agency For $217m Account
Levi's are the jeans for rockstars, models & the cool kids. Although that's not stopped dads from ruining their image.
QMS Nabs Sean Rigby From oOh!media
Things set to get spicy at the next Outdoor Media Association dinner and dance as a rival gets poached.
Bumble Reveals New Brand Identity To Usher In New Era Of Dating
It's ironic that all the dating apps market themselves as having no weirdos, freaks or mummy's boys like their rivals.