As much of the Western world grapples with rising inflation, the prospect of recession in a number of countries, and a seismic shift in the global geopolitical order, many in the marketing and advertising world are bracing for what may turn out to be white – Ankle ride like no other.
In times of great economic and political uncertainty, companies are always trying to cut their costs and do their best to keep the show going. While marketing budgets will always be under significant pressure, brands need to be very cautious and avoid knee-jerk reactions whenever possible.
Knee-jerk reactions come no sillier than the UK government’s recent anti-inflation appeal for companies to use some or all of their marketing and advertising budgets and use the money that might otherwise have been invested to bring down the prices they sell charge consumers.
In what appears to be more of a display of cheery British patriotism – as opposed to something rooted in evidence-based business or marketing thinking – the slip-up-prone government is hoping that if it can get enough companies and their brands to accepting the proposal (which is a campaign of its own) would, well, “end” inflation.
A populist plea from the same people who promised the NHS would be £350million (€413million) a week better post-Brexit and that once they could shake those pesky Eurocrats the Irish border would be fine, it is also a plea that is as stupid as it is dangerous. Oh, and this is the same government that spent a whopping £164m on advertising in 2020, which Nielsen says was a 238 per cent increase on 2019, making it the biggest advertiser in the UK, ahead of Unilever, which spent £137m spent year on it.
Just as some British companies supported Brexit after being turned on their head for the many lies that were being peddled at the time, it’s entirely conceivable that some of them, in an act of misdirection, also gave up their colors to Blightys patriotism that will almost certainly backfire.
While it may well be a stunt in the eleventh hour of a taxless and morally bankrupt government sailing towards a general election iceberg over the next 18 months, it shows a stunning ignorance of marketing and the role it plays in open competition and market-driven economies. It’s also a two-finger salute to the vast reservoir of empirical research that underpins much of modern marketing thinking.
There is no shortage of research clearly showing that marketing and advertising enhances consumer choice, stimulates competition and innovation, enables companies to increase sales, boosts employment which we know helps stimulate overall economic activity.
In the UK, for example, the Advertising Association estimates that for every £6 spent on advertising, an additional £6 is generated for the economy. A similar study conducted in Ireland in 2017 by Core and the Association of Advertisers in Ireland (AAI) found that every £1 invested in advertising delivers a net return of £5.44 and a gross return of £8.26.
That the marketing and advertising world may pick up a hard gear in the coming months is another matter. Yes, brands will be squeezing every last penny out of their budgets to operate more efficiently, and performance-based and short-term tactical campaigns will be the order of the day.
A certain nervousness is already evident in the share prices of the major global advertising networks, many of which have seen share prices fall this year. WPP’s share price, for example, is down 32 percent, while Martin Sorrell’s S4 Capital, once seen as a beacon of hope in an industry undergoing profound changes, has fallen 63 percent since the beginning of the year.
Meanwhile, the tech sector is showing signs that it too is in for a bumpy ride, as companies like Netflix, Twitter and Facebook, the latter two that rely heavily on advertising revenue, warn of troubled times.
However, in choppy waters, good marketing and promotional strategies can mean the difference between staying afloat and going under.
Defense forces get a boost
With the government planning to spend at least €1.9 billion on the annual defense budget by 2028, a new recruitment campaign for the Irish Armed Forces has been launched. The new campaign, developed by Dublin-based agency Kick, is called ‘Be More’ and featured a collaboration with Commander Lisa McMahon and her team at the Defense Forces. It aims to recruit new recruits for the Army, Air Corp and Navy and runs across TV, digital, social and OOH channels.
Connelly’s new MD
Vaunnie McDermott has been appointed Managing Director of creative agency Connelly Partners Dublin. She joined Strategem in 2016 with over 20 years of experience in the marketing and advertising industry.
Strategem was acquired by Boston-based Connelly Partners in 2018 and by Zoo Digital earlier this year. The agency’s clients include 123.ie, Shannon Airport, Expressway and Audi Ireland.
https://www.independent.ie/business/media/cutting-marketing-wont-solve-inflation-conundrum-41844733.html Reducing marketing will not solve the inflation puzzle