Quality Work Is Key to Success in Downturn

Marketing, March 26, 2008

While I agree with much of your analysis, “Cut spend, damage the brand” (Marketing, 19 March), the solution in an economic downturn is more complicated than simply retaining marketing budgets.

Of course, in good times or bad, brands need support in order to achieve their business objectives and to stay top of mind and current for customers. But it is not just about quantity
of investment. Winning the battle of the brands is also about quality of spend.

While we should all be maximising the return on investment of our marketing budget at all times, economic downturns put more focus on knowing which parts of your marketing spend deliver greatest value, and whether some of your spend may even destroy value. If you don’t, you should. If you don’t, you can.

My colleagues and I work with some of the world’s leading brand owners helping them maximise the quality of their spend. While econometric modelling provides rigour in quantifying return on previous marketing investments, creation of an ongoing programme of in-market “test and learn” activity enables companies to understand the effectiveness of their spend in the current environment.

These companies have identified marketing “waste” equal to between 15% and 25% of their total marketing budgets and redeployed those funds to drive growth and shareholder value — and that is only the beginning. Over time, they are building the capabilities and processes to continue to improve the effectiveness of their marketing investments on a systematic and replicable basis.

It requires commitment to embark on such a programme. Perhaps the threat of an economic
downturn is enough to galvanise your commitment. In a world where there is less discretionary spend to go round than there has been in the past, make sure your marketing spend is not discretionary.

Sarah Essex, Senior Partner