Securing a robust analytic capability would have helped marketers separate the wheat from the chaff as they migrated their media investments through economic hard times; however, that requires investment not only in money but time.
Economic factors will likely be more influential to your brand’s success in the coming year than anything else. Marketers face a much higher level of uncertainty between inflation, rising interest rates, supply change availability and staffing.
One possible solution a CFO sees is a cut to the marketing budget as a short-term bridge to when times are better or at least more certain. From a financial perspective, protecting operations and staffing are seen as positioning for a future bounce back, but is that a realistic expectation?
Quantifying the implications of marketing budget cuts is nearly impossible without the analytic capability of tying marketing to past, current and future sales. The typical reaction of uncertainty is to move upper funnel spending towards lower funnel activity that promises more certain “cost per acquisition” media currencies. This happened as a result of the 2008 recession leading to dramatic changes in the relative spending on newspaper versus digital media.
Concurrent to the recession was the rise of real-time bidding, which promised high buying efficiencies and conversion-oriented metrics. Marketing budgets were over-invested in digital when media currencies were immature. Internet Bots ran rampant, wasting billions of scarce media dollars when marketers could least afford it. Securing a robust analytic capability would have helped marketers separate the wheat from the chaff as they migrated their media investments through economic hard times; however, that requires investment not only in money but time.
Clearly, any analytic framework for marketers must include the very economic factors that are driving uncertainty—the “what if” scenarios need to have high, steady or decreasing inflation options. Intelligent marketers will anticipate that with uncertainty, media vendors may look to longer-term commitments at more favourable pricing. The analytic framework should not only consider campaign and channel ROAS but should also be flexible enough to incorporate a “per deal” evaluation across walled gardens. Additionally, reporting and optimization cycles need to be tightened up, while the scope of evaluation should include any viable marketing option as media money moves down the funnel.
Lastly, some companies see uncertain times as opportunities to put their business up for pitch. Whether there are efficiencies to be gained is not the point being asked here; what is up for consideration are the contractual data flow arrangements, which probably weren’t built into the last contract. If there is to be a pitch, stop considering what a more robust marketing evaluation framework looks like and how a new contract can support it. Consider marketers should be investing no less than 5% of their budgets in marketing data analytics while constantly aiming for increasing ROAS as the yield for that investment.