Interestingly, I suspect for many in the FMCG industry, 2009 didn’t prove too painful on the top line, but very painful further down the profit-and-loss ladder. Margins were under intense pressure, whether that was through discounted pricing or currency pressures adversely impacting cost of goods.
All of this meant that in order to meet bottom line operating profit targets, marketing budgets and departments were squeezed. I read much in the press about how this recession may have changed consumer behaviour for the long term. Frugal living is now trendy and it may just be that this fashion stays in fashion, irrespective of how the economy fares in 2010.
I wonder whether the same will happen with marketing spend? Academia teaches us that those brands which invest consistently reap long-term rewards and that those which cut back during recessions see little overnight impact, but suffer greatly from lost momentum in the medium to long term.
I guess the answer is less to do with how much is spent, and more to do with how well it is spent. I would argue that today’s media landscape and the rise of ecommerce makes it far easier for the smartest brands, rather than the most heavily supported ones, to rise to the fore.
I predict that 2010 will be even more testing for our profession. We will face a massive challenge securing more marketing spend. There will be many finance directors presenting the case that 2009’s cuts did wonders for profitability and had little or no impact on sales – so why not cut more?
For those assuming a return to previous spend levels, I fear you will be deeply disappointed. For those not already doing so, the time has come to treat your marketing budget as if it were your own money. Remember how much pride you felt in trimming your personal expenditure last year. Think of it as a trial run for the next decade in marketing. Happy New Year!