There is reason to be cheerful in the latest Bellwether report, which assesses the mood of senior marketers each quarter, but also cause for concern. Marketers should not be blind to the immediate risks presented by the teetering UK economy, or completely shackled by them.
Budgets were set higher in the third quarter, Bellwether found. The increase was fuelled by increased spending on short-term, direct response channels such as sales promotion and direct marketing as companies in sectors such as retail launched activity aimed at maintaining footfall and sales volumes.
Despite rising budgets, the report found that marketers’ confidence in the prospects of their own industry slumped to a two-and half year low.
This is not as much of a contradiction as it first appears. Despite having the purse strings loosened, money is not been lavished on long-term brand building using traditional or social media, it is being targeted at the quick return on investment.
Such tactics do not inspire confidence that all is well. It paints the picture that companies have dispensed with the long-game, and are battening down the hatches in preparation for the gathering economic storm.
Economic indicators paint a grim picture. The Eurozone crisis looks likely to claim the scalps of more banks, increasing the prospect of a second credit crunch and a subsequent squeeze on bank lending. Economic bodies are queuing up to present gloomy predictions for the UK economy, while rising bills and job insecurity is hitting consumer confidence.
All this in mind, marketers can be forgiven for feeling low and, short of a rapid turnaround in the economy, remaining so. There is also concern, hinted at by IPA president Nicola Mendelsohn’s rallying call to companies to keep on spending, that the mood could reverse quarter three’s increase in across all channel spending.
This, however, is not a time to admit defeat and settle for what you can get. Paid search, direct mail, sales promotions etc have their place. They should, however, augment and not replace the bold, the less tangible big marketing ideas. Investment needs to be maintained to protect long-term share.
Marketers need to be aware of the confines that the economic environment brings, yes. They need to work smarter, and more efficiently. But it will be an injustice if marketing becomes seen as an unnecessary operating expense to be kept under control.