Navigating Marketing Decisions During an Economic Slowdown
The global economy faces a range of challenges, including sluggish growth, inflation concerns, and the potential for recession. As a result, marketing budgets are often among the first to be scrutinized or cut. The uncertainty can make it difficult for marketers to commit to big-ticket spending. However, by adopting the right strategies, marketers can protect their budgets and make the most of their resources during an economic slowdown.
Defending Your Marketing Budget: Proving ROI
One of the first steps in protecting your marketing budget is demonstrating the financial impact of marketing expenditures. Katie Denlinger, principal at Deloitte Digital, advises that "the more that CMOs can demonstrate the financial impact of marketing investment, the more it will be seen as a revenue driver and not a cost center." Marketing analytics can help quantify the positive effects of marketing spend, and even marketers with limited datasets can use aggregate data to show how marketing drives growth.
Focusing on the Fundamentals: Strengthening Your Marketing Foundation
Vic Drabicky, founder and CEO of January Digital, believes that uncertain times provide an opportunity for marketers to revisit the basics, such as checkout flows, product pages, and email marketing. These elements are easy to benchmark, track, and fund. Moreover, investing in creative and brand-building efforts is essential for maintaining a presence in consumers' minds, especially as privacy changes continue to impact lower-funnel marketing activity. As Drabicky points out, "you can look at almost every bit of performance marketing and show that you have to have some sort of brand influence for it to have worked."
Turning Budget Cuts into Experiments: Maximizing Learning Opportunities
If budget cuts are unavoidable, marketers can use this situation to gain insights into which marketing channels are most effective. Jason McNellis, senior director analyst at Gartner's marketing practice, suggests turning budget cuts into a designed experiment. By dividing marketing into different channels and adjusting based on specific objectives, marketers can analyze the results and use the information to create more effective plans. "We can take these budget cuts and we can actually use them to design the best experiments that many companies have ever done in their marketing history," McNellis said.
Preparing for Future Opportunities: Staying Agile and Ready to Invest
To seize opportunities as they arise, marketers should identify ways to determine when and how to reinvest and dial up investment again. Using proprietary data to develop leading indicators for the company can help guide these decisions, McNellis advised. Additionally, continuing to test new channels, such as TikTok, during a period of belt-tightening is crucial for staying agile and ready to capitalize on new opportunities. "You've got to be committed to the testing," Drabicky said. "If you do that, you tend to move your organization forward without putting too much risk on the table.
The challenges presented by an economic slowdown can be daunting, but by defending marketing budgets, focusing on fundamentals, turning budget cuts into experiments, and preparing for future opportunities, marketers can navigate these uncertain times. Embracing resilience and adaptability will not only help marketers protect their budgets but also ensure that they continue to drive growth and maintain a competitive edge in the marketplace.
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