As interest rates and inflation rise, brands’ budgets are being tested.
For some companies, the first port of call is to cut marketing spend – here’s why that’s a bad idea…
The cost-of-living crisis is continuing to test consumers and businesses alike. As a result, according to research by Ello, 65% of surveyed marketers in the UK have already been forced to make budget cuts. Looking ahead, a further 65% of marketers believe that more cuts are to come.
Why is marketing important in business?
Companies of all sizes are having to re-evaluate how they spend their money. While some have made the decision to trim their marketing budgets, some feel that’s something of a short-sighted approach.
Marketing is the most robust bridge you have between your brand and its consumers. As such, it is the main point of contact you have with your target audience and the primary means by which you can convince them to buy what you’re selling.
Far from being an unnecessary expense, this is more crucial now than ever.
With prices rising across the board, consumer loyalty is being tested. Almost a third of UK consumers are reportedly less loyal to their favourite brands now than they used to be. Nowadays, consumers are more concerned than ever with getting good value for money.
With an effective marketing campaign, you’re far more likely to convince your target market to part with their hard-earned money. In the crowded consumer goods market and faced with shoppers who are being increasingly stretched financially, that’s invaluable.
That does mean that it’s more important than ever that marketing campaigns have the desired impact. In fact, a massive 72% of senior marketers have reported feeling added pressure to deliver return on campaign investment.
When they’re done well, marketing campaigns can…
- Strengthen positive association with your brand.
- Educate consumers about the benefits of your product.
- Keep your product front of mind.
- Convince your audience that a more expensive product is worth the money.
- Highlight deals, sales, and discounts that could entice first-time buyers, or encourage continued consumer loyalty.
Why are big brands upping marketing spend?
In summer, it was reported that Coca-Cola had hiked their marketing spend for Q2, despite ongoing economic uncertainty.
Rather than relying on short-term cost-saving initiatives, the brand has taken a long-term approach. The idea was to “create value for brands and justify new price points with an increased investment in marketing.”
The outcome? Net revenue growth of 12%.
According to Coca-Cola CEO James Quincey…
“We expect the consumer environment to be more challenging, and we are preparing accordingly, stepping up our investments, sharpening our resource allocation capabilities and tapping into data to better reach our consumers.”
Invest in your marketing department
While not every brand has a budget the size of Coca-Cola’s, consumer marketing is not just about who spends the most.
Creative, strategic, thought-provoking consumer engagement can be relatively low on cost. You just need to have the right minds in your marketing team.
Sourcing talent with in-depth experience, a sharp skillset, and a passion for your brand is what we do best. Our recruitment solutions are proven to add long-term value to marketing teams like yours.
Get in touch today to find out how:
Call us: 0333 772 7200