The Questions We Need to Ask Ourselves as We Approach Recession
As we all know, the term “recession” has been on everyone’s radar. According to the Economist, a global recession is inevitable in 2023, and the Minister of Finance of Quebec, Éric Girard, says that “there is a 100% chance that growth will be weaker in 2023 than in 2022.” As a professional in the creative and digital industries for the past 25 years, I have experienced many large-scale crises like the dotcom crash, the 2008 Financial Crisis, and the COVID-19 pandemic. During difficult times, here is my advice for businesses: maintain your marketing investments!
The Sapio Research International Business Barometer report reveals that 95% of companies are concerned about the possibility of a recession, and half of the organizations plan to reduce their overall marketing budget expenses over the next year to prepare for it. Despite this, many believe this is THE best moment to stand out and grow your business. So, how do you protect your marketing investment amid a crisis?
Start by reviewing your marketing processes
A new model is emerging in the marketing industry. We often talk about the traditional “agency + advertiser” duo, but is it profitable? Indeed, according to McKinsley, expense management can free up as much as 20% of a marketing budget and serve as both a foundation for weathering the storm and a catalyst for growth. In these uncertain economic times, there is a need to improve the efficiency of a company’s marketing processes. This is now referred to as the “advertiser + production agency + advertising agency” trifecta. This is the equation that I believe will get companies through any crisis. I often tell my clients that they can obtain efficiency gains of 15 to 20% by looking at improving marketing processes and technological tools (Martech). This efficiency gain can be translated into a reduction in investment, or it can be reinvested elsewhere in the marketing value chain. A creative production agency aims to deploy the idea across multiple channels, whereas an advertising agency will be skilled at strategic thinking and big-idea ideation. We complement each other perfectly.
Focus on content
On the eve of a recession, every company asks: what budget should we cut? If we examine the most successful companies that have maintained their marketing expenditures (P&G in 2020) during crises, we can see that they have emerged stronger and have gained significant market share. To achieve this, the real question to ask is: how can I use my marketing budget more effectively? Part of the answer is through content! When you think about all the deliverables of an XYZ marketing budget, there is an incredible amount that falls into the content sphere: social media and digital content in general. This reflection on the effectiveness of content is not only based on the media investment but also its complexity. As a business, it is crucial to think about how many creative pieces are being produced, how effective they are, and the investment required to produce them. Once you have these things in mind, it is possible to gain efficiency by changing content governance. By leveraging the technology tools that M&H employs (e.g., Adobe Workfront, Proof HQ, and DAM), we accumulate time gains ranging from 1 second to 3 minutes that have a significant impact on our clients’ annual budgets.
Remember: the recession does not last forever
For marketing specialists who fear a prolonged economic downturn, many recessions are short-lived: historically, 75% of recessions end within a year and 30% last only two quarters. In such a short period, the solution is not to reduce the marketing budget but to optimize it!
To recap, here are my recommendations to all marketing professionals:
Optimize your processes and marketing technology tools with the trifecta;
Find the right balance between content creation and media investment;
Leverage the use of technology tools to save you time….and money!
Written by Christian Quenneville, president of the creative production agency M&H. For more information, visit our website at https://www.mh.ca/toronto/