By now, I am sure you have seen the argument. Perhaps it was accompanied by a reference to a study, maybe even some statistics. “Companies that invest in brand-building advertising during times of economic crisis come out of them in better shape than those that don’t.” Something like that.
What you may not know, particularly if you haven’t had time for deeper analysis due to simultaneously working, homeschooling and attempting to resist the siren call of the gin bottle, is that there is actually a second part to the proclamation. In its original, unedited form, it reads:
“Companies that invest in brand-building advertising during times of economic crisis come out of them in better shape than those that don’t. And the vast majority of marketers who attempt to tell that to their CFOs are likely to be punched in the face before finding themselves looking for a new job.”
The reason why you are likely to walk in with a theoretical point but walk out with a practical black eye has not so much to do with the original research and its evident ignorance of selection effects (companies that invest in brand advertising during financially uncertain times are more likely to be in significantly better overall economic shape and are, therefore, also significantly more likely to come out in similarly superior levels of fiscal fitness) and more to do with the fact that, at the moment, many corporations are in survival mode.
Asking companies looking at potential bankruptcy to invest in long-term marketing is akin to telling a starving family to water the apple tree in their garden instead of eating its fruit. Not only will they ignore your advice, if need be they’ll cut down the tree for firewood.
Put simply, while there may be plenty of theoretical points that can be made at the moment, there are many more practical circumstances that render them utterly irrelevant. Businesses will care little for creating a better tomorrow if they cannot ensure that they first survive the day.
They are also, it is worth emphasising, wholly correct. There is a much too common anti-economist sentiment in the marketing community. Finance people, many lament, do not appreciate that marketing is an investment, not a cost. Sure. But it would nonetheless be strategically asinine to aim to stabilise a future cash flow through brand-building advertising if the current cash flow is decreasing so quickly that the organisation will soon be facing a point of no return.
Asking companies looking at potential bankruptcy to invest in long-term marketing is akin to telling a starving family to water the apple tree in their garden instead of eating its fruit.
To illustrate, I was recently speaking to a former colleague who now does global strategy for one of the larger industrial companies on the planet. Due to the ongoing pandemic, they had been forced to close key factories in a number of countries, effectively ensuring that an integral part of their supply chain would be in absolute tatters for the foreseeable future. The business, of course, was bleeding massively as a result. People were being laid off by the thousands.
Good luck advertising your way out of that. Or obtaining the funding to create a campaign in the first place.
This is not to say that you should stop advertising if you are, nor that marketing is no longer important for companies. On the contrary, for some, marketing may be more important than ever. But we do have to feel the proverbial room and ignore the LinkedIn amateur hour. People’s lives are, directly as well as indirectly, at stake. It’s time for the grownups to talk.
For marketing leaders, the current situation calls for two immediate shifts.
Firstly, we must reassess preset deliberate strategies and, if found unrealistic given our company’s specific context, adapt to the new reality and move budget accordingly. This will likely mean a bigger emphasis on emergent strategy for the time being but, crucially, not a full pivot. In order to prevent marketers from jumping at every opportunity and potentially harming the overall brand, a plan of action will still be needed. This is particularly true for global companies.
Secondly, we must carefully consider the potential cost of error. Strategy has never been about guaranteeing a result but improving the likelihood of one. However, at the moment the odds of something coming to fruition must be weighed against the resulting damage if it does not.
A very good start would be to limit postulation. We live perhaps more than ever in a world of uncertainty, but the more assumptions we allow, the more potential points of failure and opportunities to be wrong. There is a momentous difference between being 90% correct 90% of the time and being 100% correct 10% of the time. Or to put it differently, assumptions may lead us to be largely right, but also hugely wrong. Something that a lot of companies currently cannot afford.
Much like they cannot afford listening to armchair experts who believe that all brands are the same or play by the same rules. In slipshod theory they may. In practice, no.
If you don’t believe me, ask those who are claiming all companies should invest in brand-building advertising why they are not doing the exact same thing for themselves.
It might just save you from looking like a fool. And receiving a black eye.