There is no doubt that we are in one of the most unique economic periods in U.S. history. We have uncertainty on a multitude of interconnected factors including a volatile stock market, continuing supply chain issues, inflation, interest rates, consumer spending, labor market factors, and more.
Despite feeling like all economic news is negative, it doesn’t take much to realize it’s more of a “mixed bag” with many positive aspects. For instance, last week’s Federal Reserve Beige Book Report on the state of the economy stated, “Economic activity was about flat or up slightly since the previous report.” Labor markets overall are described as remaining tight, wages are still increasing, and employment overall is still growing, at least modestly.
The best word to describe it all? Turbulent. And our economy will remain turbulent for some time, bringing many implications for businesses. Economic uncertainty often creates anxiety, especially for marketers.
A recent CMO survey by Deloitte explores the impact of economic uncertainty on marketing budgets and again, we see mixed results. Deloitte reports that most companies are decreasing marketing spending levels (42.3%), but almost just as many (41.0%) note neither an increase or decrease and in fact, 16.7% are increasing marketing spend.
How should marketers navigate during such a dynamic economic climate? We gathered up some great advice and today, we’re sharing our top four tips:
Stay Flexible and Nimble
“There’s no such thing as a set forecast.” This was a key theme during a Wall Street Journal CMO Network event on 11/29/22. Many marketers are taking a quarterly view on strategy and spend, allowing them to be nimble and adjust as market conditions change.
Speed and agility are key as marketers try to balance long range goals with shorter-term responsiveness. Savvy marketers are also planning for multiple scenarios (as much as possible) to react to dynamic market developments.
Finally, embrace a test-and-learn mindset to help make confident and informed decisions.
Preserve Your Marketing Budget
A company’s marketing budget can be an easy target during a downturn, but you can take several proactive steps to preserve your budget and protect it from cuts.
First, make sure you have a strong relationship with your CEO and CFO. According to a recent Harvard Business Review article, “Partnership, transparency, and communication are a potential antidote to cutting critical spend.”
Next, make sure you’re able to show ROI on your marketing investments. Help your executive peers make the connection between marketing tactics, results, and ROI. Demonstrate the value marketing is delivering in tangible terms, and your budget will be less vulnerable.
Take a critical look and cut out any inefficiencies or unnecessary spend. Show discipline and proactively find some potential savings.
And finally, keep a growth mindset and advocate for long-term success. AdWeek recently reported that 60% of brands that increased their media investment during the last recession saw consistent ROI improvements. “While it may seem counterintuitive to increase spend during uncertain economic circumstances, this data suggests that being more aggressive during such times actually leads to sustained advantages—and not just during the moment, but for an extended period of time.”
Tough circumstances can often breed creativity and innovation. Innovation surged during the pandemic as many companies accelerated their digital transformation strategies to not only survive but thrive. This HBR article explores how recessions create three specific opportunities for innovation.
At the same time, if your organization has layoffs or dramatically reduced marketing budgets, insecurity and fear can stifle creativity and innovation. Strong leaders will balance transparency with insulating their marketing teams somewhat, so their marketers can still be creative and innovative thinkers.
Put Your People First
During times of uncertainty, put your people first. Your marketing team could likely be stressed out about their job security or the potential for exciting work to be limited during budget constraints. Make sure people feel valued and ensure that they are getting the transparency, clear direction, and recognition they deserve. If you must do layoffs, do them with extreme compassion and care.
Remember, the outlook for hiring marketing talent is still bright. The Deloitte CMO survey shares that the size of marketing organizations continues to increase. “Marketers report average marketing job growth of 15.1% in the last year, up from 12.2% in February 2022. This growth is expected to continue with a 7.3% increase for the next year.”
Recognize that there is still an incredible shortage of talent, especially for talented marketers. Even if your hiring budget is frozen, you should always have a talent acquisition mentality. And if you’re actively hiring, partner with an organization like Elevation Talent Group to help you conquer today’s challenging labor market.