The recession’s impact on marketing is permanent
With the announcement that both the French and German economies have contracted in the past quarter and the Bank of England has halved its predictions for wage rises in the UK, it is pertinent to reflect on just how fragile the market is at present.
In the past couple of weeks, I have met with three agency heads, all of whom said that despite media reports telling us the UK has left the recession behind and is set for a bumper era, they are not seeing that in terms of increased marketing and advertising spend by clients, or increased agency revenues.
That is true for my brand as well. After several lean years, our focus for this coming period is on growth. However, that has not, alas, manifested itself in bags of cash to invest in marketing, and, if anything, it has meant even greater scrutiny on what we are spending to ensure that it is delivering an immediate return on investment. I fear it could be quite some time before the business is ready to take long-term bets in terms of underlying brand investment.
It also means that our world has changed irrevocably. The recession has altered the way brands portray themselves to customers, and it has materially affected the agency/client relationship, such that we will never go back to the model of six years ago. Customers want deals, but also quality – the rise of brands such as TK Maxx and Lidl is testament to that. And brands want more from agencies. During the lean years, brands either took work in-house, or simply learnt to exist without it. Agencies have to work much harder to demonstrate that they understand their clients and their markets, and bring genuine innovation and insight to all that they do, in a way that never existed before.
But I am optimistic. The economy will grow, unemployment will continue to fall, and a feelgood factor will return to the high street. But I do believe that we, as marketers, have to recognise that customers are much more demanding, and we have to work significantly harder to gain and retain their custom. Our agencies need to recognise that and help us get there.
