Responding to a question about the challenge of investing in growth while cutting costs at an event in London last week, former Unilever chief executive Niall Fitzgerald declared: “You can walk and chew gum at the same time”. In other words, brand building and driving through cost efficiencies needn’t be mutually exclusive.
Fitzgerald’s comments, uttered at the launch of Brand Learning’s ‘Growth Drivers Study’, should act as consultation to those shaken by the latest Bellwether report, which suggested all was not well in the world of marketing.
Although still on the up, budgets grew at the slowest rate in more than two years in the third quarter while the confidence marketers have in their employer’s prospects and the chances of their peers is on the wane.
Inevitably, the report prompted calls for marketers to hold their nerve, to stop prioritising cost cutting over long-term growth. There is a feeling among those reliant on bullish brands throwing their cash around that brands have been in a permanent state of parsimony since the collapse of Lehman Brothers in 2008. Sir Martin Sorrell, CEO of the world’s biggest marketing services company WPP, has consistently warned clients about “cutting their way to growth” over the last couple of years.
Sir Martin and others warning of such follies are right if brands are cutting to remove operating costs and satisfy investors that they are talking and acting tough. You can, however, invest and cut, or to return to Fitzgerald’s analogy “walk and chew” at the same time.
Three of the world’s biggest advertisers – Unilever, Procter and Gamble and Coca-Cola – have all taken millions out of their marketing budgets in recent years by cutting non-working media, agency fees and shifting money to digital and global marketing centres. All have or at least vowed to reinvest in increased media spend.
It might not be welcomed by all in the marketing eco-system but being mindful of outlay is very much part of a marketers psyche in 2015. Speaking at the same event as Fitzgerald and responding to the same question, Virgin Media CMO Kerris Bright said it was incumbent on marketers to be constantly mindful of opportunities to drive efficiencies – “otherwise consultants will do it for you” – in order to justify increased spending,
“Cut and invest to grow” should be a marketer’s new mantra. It is the only way to command influence, respect and a boardroom hearing in the post Lehman world.
Brand Learning will deliver the findings of the ‘Growth Drivers’ study at the Festival of Marketing in November. For more information and to get tickets click here.