As IPA City Head for Birmingham and the West Midlands, I’m often asked for my views on how Brexit will affect our industry. From what I read and what I hear talking to my peers in the industry, there’s clearly talk that the UK will be plunged into its first advertising recession in a decade in the event of a no-deal.
So if that’s the case, how will we advise our clients?
It’s something we bang on about all the time here at GBW: research shows that brands that are able to push forward in times of economic uncertainty will reap the rewards.
Tightening budgets and pulling back on marketing is likely to leave your share of voice open to be acquired by your competitors. If those competitors are brave and invest at a time when others aren’t, the extra share of voice they gain will ultimately increase their market share.
Commenting on the Bellwether report released last month, which revealed after six years of continual growth marketing budgets had remained the same in the last quarter of 2018, Paul Bainsfair, Director General at the Institute of Practitioners in Advertising (IPA), was in agreement:
“Marketers need to weather this turbulent period and think ahead,” he explained.“Now is the time to be bold, to keep up their share of voice and, if they can, increase it to grow their share of market. Businesses that rely on the strength of their brands need to follow the general 60:40 (brand building vs activation spend) rule of thumb.” https://ipa.co.uk/news/q4-2018-bellwether-marketing-budget-growth-hits-zero/
Research gathered from IPA effectiveness papers and brought together in the latest book from Binet and Field “˜Effectiveness in Context’ makes for great reading.
It advocates brand building and shows the correlation between brand building and campaign effectiveness running across all contexts. Without brand strengthening, growth is weaker, activation is weaker and pricing position will not improve resulting in reduced profitability.
Using case studies from Aldi it illustrates the importance of brand building in retail and the value it brings over pure activation.
Brands will do well to remember that heavy reliance on promotions can erode brand values and destroy profit margins; they may be better off raising awareness and engagement and maintaining a strong, emotional bond with customers in the interests of long-term gain.
When consumers get used to seeing discounts around them they just stop believing the regular prices and their perception of value in the product is reduced. An analysis of nearly 880 case studies published by the World Advertising Research Centre shows that ad campaigns that focus on emotional engagement tend to be more profitable than ad campaigns that focus on rational messages (such as low prices or special offers), even when times are tough.
The expectation for brands to produce more imaginative experiences continues to grow whatever the current climate highlights so it’s more important than ever for companies to enlist creative specialists and explore the experiential.
At GBW, we’ve been here before, after the credit crunch of 2008 (and some of us even further back..!), so we feel prepared and are already advising our clients on this. But ultimately, we understand that no one knows our clients’ businesses better than they do.
So if we can bring insight, best practice and creativity to help our clients create robust marketing strategies during this period of economic uncertainty, then we think that’s a winning combination.
If you’re interested in finding out more about how we could help you, just drop me a line (01527 579555 michelle.w@gough.co.uk) and we’ll meet up for a coffee.