The vast majority of marketers are cutting or maintaining their marketing budgets, saying that while finance teams understand the rationale behind investing in media during the coronavirus pandemic, they simply don’t have the money to do so.
By Sarah Vizard
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Just 7% of UK marketers say their brands are taking a strategic approach to invest more in marketing during the coronavirus pandemic, with the vast majority forced to maintain or cut spend in the face of business disruption.
A survey of 477 UK brand marketers conducted by Marketing Week and sister title Econsultancy found that 7% are taking a ‘seize the opportunity’ approach and investing more in marketing.
That compares to 29% who say their approach is to ‘stay the course’ by maintaining budgets and 50% who say they are making cuts so they can ‘live to fight another today’. A further 14% say it is too early to know what their strategic response to marketing will be.
When asked to describe how their organisations are making decisions, 27% said their marketing strategy was based mostly on instinct, versus 13% saying it was mostly based on data, and 60% saying it was a balance of the two.
When it comes to the marketing mix, a quarter (26%) believe decisions are made based on instinct and just 19% based on analysis or data. And on brand messaging, 40% believe decisions are based mainly on instinct, versus just 10% who say they are based mostly on analysis.
Marketers told to ‘hold their nerve’ as budgets drop at fastest rate since last recession
Looking at funding in specific areas, offline media is taking the biggest hit with 57% of marketers cutting their budgets in this area, 41% maintaining it and just 3% increasing. In digital media, 32% are cutting budgets, 44% maintaining and 24% increasing spend.
The data also suggests that while finance and leadership teams across the business understand why investing in media might be important during pandemic – with data from previous recessions suggesting that those which stand out can emerge more strongly – they simply don’t have the cash to do so.
Almost half (46%) of respondents said that if they asked to increase media spend, their leadership team would say that, while they understand the motivation, there is no cash to spend. Some 32% of marketers said finance would ask them to prove the case before they would consider it, while just 13% said finance would ask for a plan on how to do it.
One in 10 believe finance would say they were wasting their time.
Shifting marketing priorities
Not only are budgets under pressure, but priorities are shifting. Almost a third (29%) of respondents say they are making more investments in brand values, for example through charity donations.
A similar number are reallocating budgets from acquisition to retention, while 45% are changing their ads or their content to make them relevant. Almost half (47%) are shifting messaging to emphasise digital fulfilment, products or services.
Brands are also shifting resources. Some 19% say they are “shifting everything we can” from third parties to in-house, while 47% are shifting people between teams to meet new demands.
While the figures make for depressing reading for many marketers, there are some positive signs coming out of new ways of working. Some 42% of marketers say they have seen innovation in customer communications, while 43% say they have made use of innovations in marketing messaging and branding that they might use post-outbreak.
B2B versus B2C
Analysis of the response of more than 850 marketers at brands globally from the same survey finds that B2B brands are taking a more optimistic approach to marketing during the pandemic than B2C. Some 14% of B2B marketers describe their approach as ‘seizing the opportunity’, compared to 8% of consumer-facing marketers.
Finance teams at B2B companies are also more likely to be open to investing in media, with 17% of marketers saying their finance teams would think it was a good idea and 37% that it would be considered if they could prove the case. Just 5% said their finance teams would say they were wasting their time, and 40% that there is no money for such an approach.
In B2C, by comparison, just 11% said their finance teams would think investing was a good idea and 29% that they would consider it. More than half (52%) said there is no cash to spend, while 8% believe finance would think they were wasting their time.
As the coronavirus pandemic shut down everyday commerce in 2020, businesses across the globe shifted focus, switching to remote work and in many cases offering new products, services and delivery methods to reach customers and maintain operations.
As the virus swept the globe, brands changed how they interacted with customers due to social distancing and stay-at-home orders. Consumer buying patterns also shifted with fluctuations in the stock market, skyrocketing unemployment and supply chain issues.
Tauber and Zandweghe argue that the lockdown and social-distancing safeguards implemented by government, businesses, and consumers during COVID-19 caused a shift in consumer demand from services to durable goods.
Business Size: Small Businesses Hit Harder Than Larger Ones
From the second quarter of 2020 to the second quarter of 2021, employment at businesses with one to four employees fell to 81 percent of its level at the beginning of the pandemic.
Total nonfarm employment fell by 1.4 million jobs in March 2020 and a staggering 20.5 million jobs in April, creating a 22 million jobs deficit since the start of the recession and largely erasing the gains from a decade of job growth.
Specifically, the COVID-19 pandemic fundamentally affected organizations and their traditional ways of working (i.e., paper-based processes), since workers needed to work from home, increasing the need for digitalizing work processes (Almeida et al., 2020).
21% had a decrease in income their income and 15% attributed it to COVID19. 43% have had to cut back on buying necessities and 46% have cut back on buying major household items. 65% are spending more on buying groceries instore and 58% online.
Some of the COVID‐19‐induced behaviours that were studied include consumption shifts (Kansiime et al., 2021; Pakravan‐Charvadeh et al., 2021), impulsive buying (Naeem, 2020), stockpiling, and panic buying (Billore & Anisimova, 2021; Keane & Neal, 2021; Naeem, 2020; Prentice et al., 2021), product and brand substitution ...
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For many consumer goods companies, the pandemic has become a liquidity crisis more than anything else. Building a new supply and sales strategy requires the investment of both time and money in transforming retail inventory management, warehouse inventory management, supply chain management, and more.
Other sectors, particularly consumer products, couldn't keep products on the shelves in the early days of the pandemic since toilet paper, canned goods, flour and other staples were in high demand. Some sectors were hit particularly hard, however.
In 2022, of those companies that were impacted by the coronavirus pandemic but had returned to normal level of operations in 2020, 2021 or 2022, 4.1 percent of companies canceled, 12.45 percent postponed, 11.65 percent decreased, and 2.8 increased some of their budgeted capital expenditures during the coronavirus ...
According to the Small Business Administration, small companies generated 12.9 million jobs over the past 25 years, accounting for 66% of employment growth in the U.S. Small businesses also contribute 44% of the U.S. gross domestic product (GDP), so as the number of new businesses grows so do their economic ...
Neurological symptoms or mental health conditions, including difficulty thinking or concentrating, headache, sleep problems, dizziness when you stand, pins-and-needles feeling, loss of smell or taste, and depression or anxiety. Joint or muscle pain.
Economic shocks caused by the Covid-19 pandemic severely disrupted global supply chains. At the same time, Covid-related shutdowns rapidly rotated consumer demand towards goods and away from in-person services.
The results show that there are seven major areas that have been negatively affected by the COVID-19 pandemic: health, social vulnerability, education, social capital, social relationships, social mobility, and social welfare.
For many restaurants in California and elsewhere, one of the biggest challenges of the pandemic has been the stop-and-go process of closing and reopening.
Net losses of 126.4 billion USD, on revenue loss of 373 billion USD by airlines were observed in the year 2020. Direct aviation jobs (at airlines, airports, manufacturers, and air traffic management) decreased by approximately 43 %, and aviation- supported jobs are estimated to have reduced by 52 %.
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Just 7% of UK marketers say their brands are taking a strategic approach to invest more in marketing during the coronavirus pandemic, with the vast majority forced to maintain or cut spend in the face of business disruption.