Recession? Don't Stop, Adapt.
The government is set to launch a campaign aimed at getting businesses to divert marketing spend, which will supposedly help mitigate the cost of the living crisis.
While this may make sense to some on the surface, what if it’s actually backwards logic?
What impact will this have on an industry built on attracting and retaining customers, and how will agencies manage the expectations of their clients?
The benefits of marketing in tough times
Many people are surprised to learn that increasing marketing during a recession can often lead to growth.
Cutting down on marketing during a financial downturn will reduce your online and offline presence, leaving the door wide open for your competitors.
Here are a couple of great examples of companies who have bucked the trend in past financial downturns:
In the 1990-91 financial downturn, McDonald’s reduced their marketing spend. Conversely, Taco Bell and Pizza Hut retained their marketing activities and marketing budget. As a result, McDonald’s saw a decline in sales of 28%, whilst Pizza Hut grew by 61% and Taco Bell by 40%.
Famously, Amazon grew its sales revenue by 28% while the world was in recession from 2008 to 2009.
Navigating pressure and finding success
The pressure on all marketing agencies is going to increase in the coming months. Clients will consider, and in some cases, reduce their budgets as they shift their focus to achieving results. So, how can we mitigate against the inevitable storm that’s coming our way?
The time has come to adapt in order to become futureproof. Here are some suggestions that might just help:
Move your insight reporting to a multi-touch attribution approach. Last touch, first touch, linear models are largely ineffective and provide unactionable insight.
This might sound difficult to do, but it really isn’t.
There are organisations who specialise in offering multi-touch marketing attribution (we are one such company), and it really doesn’t cost a fortune. Within 4 to 6 weeks, you can have a clear understanding of how your marketing efforts are performing. This removes any ambiguity between you and your client, proving your marketing efforts are working.
Multi touch attribution considers all marketing channels in the process that leads to a conversion event. By crediting each channel that contributes to a conversion, it prevents marketing activities from being devalued just because they are not directly associated with driving conversions. We work with many clients who prove this day in day out.
As an example, a luxury jewellery brand had no evidence their Facebook advertising was driving any real revenue. We ran our impact analysis and proved a minimum 20% impact on overall sales. Had our client turned this campaign off, or even reduced it, the ramifications could have been catastrophic.
Making the right decisions
These are the types of decisions that might happen in a more pressurised world.
Another client wanted additional budget for their Display advertising but had no tangible evidence of its impact. We ran the same process and highlighted that this channel actually contributed to a whopping 11% of all sales.
It’s time to start making evidence-based decisions and removing the fear of failure. Knowing how your marketing channels are performing at the top, middle and bottom of the sales funnel is paramount to success.
Make sure you have the correct data and insight to support your decisions rather than cutting budget that could actually cost more than it saves.
To find out how Cubed’s multi touch attribution can help your marketing agency, please get in touch.