‘Concentrate on what you can control’: How marketing can work smarter in a recession
Recent years have delivered uncertainty on an unprecedented scale, and while this shows no signs of changing, marketers should rely on their brand foundations and put trust in investing for the future.
At a time when budgets are under pressure for marketers and consumers alike, the question of what brands mean to people becomes ever more urgent – as does the task of maintaining consistent and relevant communications while wallets are being severely squeezed. The UK’s consumer confidence index has fallen to historic lows thanks to the cost-of-living crisis, while 41.8% of respondents in the most recent IPA Bellwether report say their industry’s financial outlook has worsened, compared to only 8.7% who say it has improved.
In a bid to shed a positive light on the opportunities for brands in today’s economy, industry experts gathered this month to discuss their own market-leading approaches in a panel debate hosted by global production house Tag and ISBA, the trade body for advertisers.
Andria Vidler, CEO (EMEA) at Tag, began by laying out the challenge: “In situations like these, where what’s going on is out of our control, it really sets apart the companies that take control. The muscle memory that kicked in during Covid-19, which forced people to think differently, has started to kick in again. We’re being asked ‘how can we work smarter?’”
In introducing the panel, ISBA’s director of agency services Nick Louisson said he has been impressed by how ISBA members have “come together, rallying together for insights, guidance and community” at a time characterised by volatility, uncertainty, complexity and ambiguity.
These four challenges are summed up in the military acronym VUCA, coined in the aftermath of the Cold War, which panellist Ed Palmer, managing director at agency St Luke’s, cited as “the new normal” for today’s brands. Consequently, marketers need new ways of strategic thinking that identify what each of these four challenges look like in their marketplaces, and how their plans might need to change as a result.
Each of the four aspects is distinct and applies to different situations. For example, volatility might apply to sudden fluctuations in prices, in which case holding more stock and maintaining budget headroom can help. Uncertainty might relate to what competitors are planning, however it can be lessened by investing in market intelligence. Complexity may exist where brands trade in multiple markets, but can be managed by simplifying internal structures and processes. And there may be ambiguity where you don’t know what the consequences of new product or campaign launches could be, but you could experiment on a small scale first.
“A good start point is being clear on what your brand is. That’s your point of consistency. That will help you deal with uncertainty,” said Palmer.
Get the baseline right, but then identify where you can sprinkle a bit of magic.
Toby Horry, TUI
In many cases, investing in brand need not be about new messaging or communication channels. Simply staying true to brand values while both drawing on and reinforcing brand equity can provide strong foundations if you’re forced to react to rapidly changing circumstances.
“The brand must be clear and consistent so that everything you’re doing is building on itself,” Palmer suggested. “In a well-branded universe, you might be spending the same, but the effect is amplified. When you need to improvise [in challenging times] it falls into place.”
Another panellist, TUI’s global brand and content director Toby Horry, gave the example of how a shortage of baggage handlers impacted customer experience in the travel industry in 2022. While no company can fix this or the many other ongoing crises single-handedly, “breaking down the experience into component parts and looking at what makes the biggest difference” can result in meaningful improvement, he said.
“Get the baseline right, but then identify where you can sprinkle a bit of magic. If you’re clear what your brand stands for, it becomes easy to spot those moments.”
Invest in the future
Indeed, maintaining brand health not only addresses the immediate challenges of today’s environment but provides a strong foundation for recovery when the economy bounces back. This is perhaps one reason that the Bellwether Report found more than twice as many respondents expected marketing budgets to rise this year as expected them to fall, despite the economic climate.
Emma Botton, Tesco’s group brand, proposition and marketing communications director, explained why: “You overinvest at a time when you think you’ve got something to say, because that brand needs to be there during the recovery, and you don’t want to be catching up. In any kind of relationship, in good times and bad, you need to be present, and you need to be listening.”
Palmer likened this situation his agency’s initial response to Covid lockdowns in 2020: “We were cutting back on costs but the one thing we thought we had to carry on with was our own marketing. There wasn’t much business in 2020 but it really paid back in 2021. And by talking about the agency’s experience with that, it’s much easier to have authentic conversations with clients [today].”
Any business that wants to be around in 50 years would be foolish to ignore sustainability.
Emma Botton, Tesco
The panellists agreed that this is exactly the time when the term ‘agency partners’ really comes into its own. Tamara Lover, Tag’s divisional director explained: “The key is understanding our clients’ challenges and making those our problems as well, so we can roll up our sleeves and work with them, using what we have in our toolbox to be more efficient and effective.”
She gave the example that a client might have a digital asset management system filled with 30,000 assets, only 30% of which are being used. “It’s our responsibility to go back to the client and work with them further upfront so we can make sure we’re producing content and spending money smarter.”
The panellists agreed too that sustainability is a non-negotiable element of future-proofing brands. Tesco’s Botton said “any business that wants to be around in 50 years would be foolish to ignore this” and added that the company’s sustainable credentials are one of the first things on prospective employees’ lips during the hiring process.
Tag’s Lover revealed that, from the partner side, the carbon footprint of communications can be a significant consideration. For example, the biggest carbon contributor for one of Tag’s clients was found to be a fence built on the set of an advertising shoot.
“We have to help our clients on that journey so now we’re looking at the different technology available to us that reduces carbon footprint – and in many instances makes us faster and more agile.”
Time to react
If the first part of planning for uncertainty is to adhere to brand values and build a solid long-term proposition, the next question becomes when and how to adapt to changing circumstances.
While everyone is experiencing the same macroeconomic environment, it’s important to acknowledge not everyone is impacted equally, with TUI’s Horry pointing out that there is nuance across consumers’ affordability appetites. This is where consumer understanding on a granular level becomes important in predicting demand, and in changing offers and communications where needed.
“We leverage our 300 high street stores, filled with passionate colleagues who are our primary source of insight. That qualitative feedback is hugely important. You need to concentrate on what you can control. Look at the sales data,” Horry said.
Tesco’s Botton agreed: “All our team is encouraged to go in-store; one, because that shows support for our colleagues on the shop floor; and two, because you see what people are actually doing.”
She said this “feet on the floor” approach had revealed, for example, an increase in people’s use of barcode-scanning handsets while shopping, because it allows them to tally up their basket and put items back if they’re too expensive without the awkwardness of doing it at the till. The conversation around those devices used to be about convenience, but today it’s about budgeting.
Botton also said doing store visits with Tesco’s chief financial officer at Christmas had the benefit of bringing elements of marketing expenditure to life and putting them in the context of financial forecasting, which is crucial. “We’ve got really good econometric modelling so I can tell you, for every pound spent, what the short-term benefit will be for the business, as well as the long-term.”
Both long- and short-term thinking will be crucial for marketers and their partners as the recession runs its course. It is tempting to be pulled in different directions when targets are not being met and panic sets in, but as the panel demonstrated, there are plenty of ways to prepare for unexpected setbacks, while also protecting long-term brand value and building foundations for recovery.