Thursday, August 11, 2022

Cutting marketing won’t solve the inflation problem

As much of the Western world grapples with rising inflation, the prospect of a multi-country recession, and a seismic shift in the global geopolitical order, many in the world of marketing and advertising are bracing for what could become a target. -Knuckle ride like no other.

As always during periods of great economic and political uncertainty, companies will be looking to cut costs and do whatever they can to keep the show on track. While there will always be considerable pressure on marketing budgets, brands need to tread carefully and avoid knee-jerk reactions where possible.

The knee-jerk reactions are no dumber than the UK government’s recent plea to businesses to use some or all of their marketing and advertising budgets and put money that might otherwise have been spent into driving down prices that charge consumers.

In what appears to be more a display of good British patriotism, as opposed to something rooted in evidence-based marketing or economic thinking, the blunder-prone government hopes that if it can get enough companies and their brands adopt the proposal. (which is a campaign in its own right), well, it would “end” inflation.

A populist plea from the very people who promised that the NHS would be better off to the tune of £350m (€413m) a week after Brexit and that the Irish border would be fine and dandy once they could get rid of those pesky Eurocrats, it is also a plea that is as foolish as it is dangerous. Oh, and this is the same government that spent a whopping £164m on advertising during 2020, which according to Nielsen was a 238% increase on 2019, making it the largest advertiser in the world. UK, ahead of Unilever, which spent £137m in the same year.

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In the same way that some British companies backed Brexit after being plummeted by the many lies spread at the time, it is entirely conceivable that some of them will also nail their colors to Blighty’s sunken mast in an act of blunder. . patriotism that will almost certainly backfire.

While it may also be a last minute stunt by a rudderless and morally bankrupt government sailing toward a general election iceberg within the next 18 months, it shows a staggering ignorance of marketing and the role it plays in open and competitive market. and market-driven economies. It also gives 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 improve consumer choice, stimulate competition and innovation, enable businesses to increase sales, boost employment which, as we know, helps drive overall economic activity. .

In the UK, for example, the Advertising Association estimates that every £1 spent on advertising generates an additional £6 for the economy. Similar research conducted in Ireland by Core and the Advertisers Association of Ireland (AAI) in 2017 found that every €1 spent on advertising generates a net return on investment of €5.44 and a gross return of €8.26.

That the world of marketing and advertising may be going through a rough patch in the coming months is a different matter. Yes, brands will squeeze every penny out of their budgets to run more efficiently, and short-term, performance-based tactical campaigns will be the order of the day.

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A hint of nervousness can already be felt in the share prices of the big global ad networks, many of which have seen their price collapse this year. WPP’s share price, for example, is down 32%, while Martin Sorrell’s S4 Capital, once seen as a beacon of hope in an industry undergoing profound change, has seen its share price fall. by 63% since the beginning of the year.

In the tech sector, meanwhile, there are signs it’s also facing a bumpy ride with companies like Netflix, Twitter and Facebook, the latter two relying heavily on ad revenue, choppy waters warn. in front.

However, in rough waters, good marketing and advertising strategies can make the difference between staying afloat or sinking.

Defense Forces get a boost

With the Government planning to spend at least €1.9bn on the annual defense budget by 2028, a new campaign has been launched to recruit the Irish Defense Forces. Created by Dublin-based agency Kick, the new campaign is called ‘Be More’ and involved a collaboration with Commander Lisa McMahon and her team in the Defense Forces. Aimed at finding new recruits for the Army, Air Corps, and Navy, it is running across TV, digital, social, and OOH channels.

Connelly’s new CEO

Vaunnie McDermott has been appointed managing director of creative agency Connelly Partners Dublin. With over 20 years of experience in the marketing and advertising industry, she joined Strategem in 2016.

Strategem was acquired in 2018 by Boston-based Connelly Partners in 2018 and earlier this year acquired Zoo Digital. The agency’s clients include, Shannon Airport, Expressway and Audi Ireland.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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