When it comes to advertising in challenging economic times, there’s one piece of advice offered more than most: don’t go dark.
One brand that has followed that advice is luxury ice cream brand Little Moons.
Speaking at Advertising Week Europe in London today (17 May) marketing director Ross Farquhar explained how the scale-up business protected marketing spend in the face of rising costs and brittle consumer confidence.
It has also continued to invest in media despite inflationary pressure, Farquar said. “We have seen the benefits of investment outweigh the headwinds,” he claimed.
It wasn’t easy for Farquhar to convince its executive to maintain spend with marketing when every business is looking to cut costs. He spoke of how he spent a lot of the past 12 months “influencing around the organisation” convincing those in charge of spending that it was important to “keep the faith” in marketing with two main arguments.
“One argument was that in a recessionary environment there’s a case to be made for increasing your marketing investment because everyone else tends to spend less, your share of voice goes up and you grow faster,” he explained.
“The second was this is a once-in-a-brand-lifetime opportunity as we’ve gone from small to big, the attention being paid to us has been massive and if we stimulate this interest we’ll see results, not only in the short-term, but because we’re a category disruptor, we should see it in the long-term too.”
Obviously this is easier said than done in most cases when it comes to the P&L and if there’s a lot of uncertainty in the market, it can be easier to cut marketing budgets than it is to cut headcount, he went on to say.
He solved this by putting his trust in “econometric modelling” which made all the difference in convincing those above that marketing was having a positive effect on the brand. “It’s like a black box which tells you how your demand works and what your marketing investment is doing. That’s the holy grail for us, right? So many marketers are walking around organisations saying that it’s so hard to measure something and it’s usually a leap of faith,” he adds.
Modelling came courtesy of Magic Numbers, whose founder and Marketing Week columnist Grace Kite and its chief operating officer Sarah Stallwood hosted the panel on which Farquhar was speaking.
“Inflation will create winners and losers,” said Kite. “The trick is to work out which one you will be.”
She points to how brands who are considered a “necessity” by the consumer will do well as people will continue to buy them regardless of price and that “you’ll be able to pass on inflationary costs”. But the “loser” brands will be those who people feel they can put off purchasing until things have picked up, she adds.
The key thing to remember, she continues, is that most economists and analysts believe the current economic downturn will be different to previous dips. A topic she touched upon in a recent Marketing Week column.
Stallwood went on to explain that despite the pressures businesses are facing, it is vital that they “don’t go dark” with their marketing as you can still “gain a share of voice” in the market, just like Little Moons, when other brands go quiet due to financial pressures.
Little Moons’ Farquhar acknowledged consumer confidence has “taken a knock” and that in turn has had a “knock-on effect on the brand”, but he claimed early signs indicate Little Moons is a luxury treat in tough times.
The brand has grown its distribution rapidly and is now readily available across the UK, Farquhar explained.
This extends to trends in the category too. “We’re noticing that people are trading up and down,” he said. “We’re in the everyday luxury market as we’re at the top end of pricing in the ice cream category and so our demand has been resilient.” Other low-cost brands, such as Wall’s one litre vanilla ice cream have also grown at the bottom of the market, he says, it’s the brands in the middle who are feeling the effects the most.