These are nervous times for brands and advertisers. Having successfully weathered two years of a global pandemic and entering 2022 with hope, they are now faced with runaway inflation, global geopolitical uncertainties, supply chain shortages and, to top it all off, falling consumer sentiment at every turn.
Back in January it was forecast that most marketing and advertising budgets would increase this year as many economies began to adopt a form of living with Covid strategies as consumers started spending again.
Aware that they may have underinvested in 2020 and 2021 due to various lockdowns in various markets, many of the major global consumer-facing brand owners have committed to increasing their marketing spend in 2022.
In the case of the two leaders in the global marketing industry — P&G and Unilever — the former announced in its Q1 2022 earnings call that it will increase its marketing spend by 30 percent, or $130 million to get it back up to bring it back to pre-pandemic levels.
As a percentage of total sales, that’s down 80 basis points, but P&G has successfully managed its marketing investments in areas like performance-based marketing and digital advertising spend over the past several years. This has ensured that it gets far better bang for its marketing buck.
With well-known household brands like Olay, Gillette and Pantene in its stable, P&G is also the largest marketing investor with annual spends in excess of €10.5 billion per year.
Elsewhere, Unilever, the second-largest marketing investor, with a $7 billion marketing budget, walked away.
But other global giants with consumer-focused brands in their stables have also ramped up their marketing spend for 2022, and it’s reflected in their Q1 results as well as those of the global advertising agency giants.
Earlier this week, largest agency group WPP raised its annual revenue forecast after a strong performance by its media investment business Group M fueled revenue growth of 9.5 per cent to £2.6bn in the first quarter. For the year as a whole, the group is now anticipating sales growth from 5.5 percent to 6.5 percent.
Group CEO Mark Read told UK media this week the company is “aware of the economic risks and our guidance takes into account the economic outlook. From today’s perspective, we have not seen any major spending cuts from our customers.
“We see some pros and cons here and there, but they tend to cancel each other out.”
Meanwhile, Omnicom, another global network, said it raised its full-year forecast to 6.5 percent while Publicis stayed at 5 percent because there was “too much uncertainty”.
While some element of inflation would have been factored into 2022 budgets, it’s probably fair to say that most companies and their brands underestimated the magnitude of it.
With a full-blown global energy crisis and a protracted war in Ukraine becoming more likely by the day, stressed consumers will already feel it the hardest.
Brands not only need to keep their cool, but also respond to the pressure consumers are feeling.
Historically, the big retailers have always been good at it.
In the last recession, they all had recession-breaking deals. Fast forward to 2022 and many of them are offering inflation-linked deals. Lidl’s offer to feed a family of four for less than €74 a week is a perfect example of this.
When push comes to shove in the marketing world, the standard response has always been to cut marketing costs.
While there’s ample empirical evidence that this is the wrong strategy, coming so close to the global pandemic makes it even more dangerous, as several years of consecutive underinvestment will be a killing blow for most brands.
Most importantly, now is the time for marketing to really engage with consumers to help them solve their problems – whether it’s a quote on their energy or other utility bill, a special offer on their purchase or their stay have been putting off for a few years. In other words, more than ever, brands need to be responsive to their customers’ needs.
Ad Complaints Down
The total number of complaints to the Advertising Standards Authority of Ireland (ASAI) in 2021 fell by 12 per cent, according to its 2021 annual report released later in the week. During the year, ASAI received a total of 1,450 written complaints about 959 advertisements, with the travel and vacation industry generating the largest number of complaints at 207. Once again, digital media continues to generate the most complaints, accounting for 696 or 48 percent of all complaints.
Accenture on song
Accenture Interactive, which employs more than 150 people in Ireland, has changed its name to Accenture Song. As part of the consulting group Accenture with global headquarters in Dublin, the digital and marketing services group is the largest in the world with expected sales of around 14 billion US dollars (13.3 billion euros) this year. Accenture has acquired a number of top agencies worldwide over the past 10 years, including Irish agency Rothco, which was acquired in 2018 for €35 million.
https://www.independent.ie/business/irish/in-the-toughest-of-times-pitch-perfect-marketing-is-more-important-than-ever-for-brands-41604062.html In the most difficult times, perfect marketing for brands is more important than ever
