The UK economy is finally showing green shoots of recovery, so where should B2B marketers be looking to invest – if at all? Victoria Paley investigates
Recent marketing reports are presenting mixed messages as to how the economic recovery is affecting the industry. The recession hit the marketing industry hard with many marketing decision makers forced to slash budgets, reduce headcount and rein back campaigns. The latest IPA/BDO Bellwether survey, published on July 12, reveals that marketing budgets have been revised down in Q2 as a result of an uncertain economic outlook. The survey acknowledges that marketing spend is still set to increase in 2010, but that it is unlikely to rise at the rate expected at the start of the year.
Marketers, it seems, remain cautious about spend against the risk of a double dip recession and the implications of the next government budget announcement. As Nick Gill, planning director at integrated agency DCH surmises, “Having moved from recession to cautious optimism and now back into austerity measures, businesses are being as careful with their budgets as the coalition Government.”
Boom not gloom
In contrast to the Bellwether survey, the new European Market Eye Report from recruitment consultancy, Aquent, portrays a much brighter picture – at least for marketing agencies. The report suggests that the marketing and design industry is seeing strong signs of renewed business confidence with three out of five organisations predicting a rise in permanent marketing staff. It also reports that salaries are expected to double throughout the remainder of 2010.
At the same time, the advertising industry is also experiencing renewed confidence. According to the latest Advertising Association and the World Advertising Research Center (WARC) Expenditure Report, the UK advertising industry has reported a return of confidence, suggesting that advertising will grow in Q2 by 3.6 per cent year-on-year.
It’s a confusing picture. If some marketing budgets are indeed being revised down, as the Bellwether survey suggests, what can B2B marketers learn from this divergent data and how should they be allocating their spend?
Cheaper channels
Social media has been around for some time now but is one obvious beneficiary of the fragile economy as it is often perceived as a low-cost option.
Indeed, results from another survey, Anderson Analytics MENG Marketing Trends Report 2010, reveal that 70 per cent of respondents are planning new social media initiatives this year. For the first time in the report’s history, social media and mobile marketing both made it on to the top 10 list of issues most important to marketers.
Richard Moore, influencer marketing manager at IBM, suggests one reason that marketers may be thinking to invest in social media during a shaky economy is because, unlike more traditional routes, less spend is needed upfront. “Most of us employ social media in our private lives at no expense. We might therefore sensibly expect it to be inexpensive to employ social media on behalf of our respective businesses.”
In addition, Simon Rutt, director of marketing and partner alliance at Trustmarque, proposes that marketers are also wise to invest in online advertising and SEO to ‘gain market share and take advantage of more prudent competitors.’
Social media activity is not only perceived as cheap, it’s also thought of as quick to implement. Strategic managing partner at Balloon Dog, Greig McCallum, says that businesses are “being forced to look more short-term. Media that might build a brand over several quarters or years (like sponsorship, for example) are under pressure with only far-sighted clients embracing such campaigns.” In particular, he suggests that B2B brands might look to invest in mobile, “Immature channels, such as mobile, could make headway now if they manage to really pull together a robust effectiveness case.”
Money spent wisely
Like social media, ROI is not a new discipline in marketing. Marketers have always looked closely at it but the current economic climate has placed this issue in the spotlight more than ever. The Marketing Trends Report 2010 revealed that compared to 2009, marketing executives view ROI as the most important marketing issue, surpassing customer satisfaction and retention.
John McCambley, head of brand marketing and communications at research and insight agency McCallum Layton says, “The current climate is forcing marketers to look at ways of working smarter with their respective budgets. Marketers are now having to work closely with their financial teams, not just in negotiating a suitable budget… but in today’s climate we are having to prove our worth. The days of reckless spending are over.”
Rebecca Morgan, marketing manager at subsea and offshore grouting specialists Found Ocean, voices similar thoughts. “Going into and coming out of the recession, we haven’t seen a decline in money being spent on marketing but it is being used more wisely.” Morgan goes on to say that “every marketer should be making the marketing budget more efficient by working it harder and in the right places.”
Focus on spend
So, where might some of the ‘right places’ be for marketers to focus their spend? Francois Laxalt, marketing intelligence manager at Neolane, suggests that face-to-face channels are the way forward in order to help build on new and existing customer relationships. Laxalt reveals that Neolane is “increasing its prospects database, organising more best practice-oriented seminars (with customer testimonials) and hiring field marketing people to manage this growth.” He also suggests that B2B marketers should be focusing their spend on locating more leads and managing pipelines better to win more sales.
Laxalt is not the only one to think that B2B markerers should still be focusing some of their spend on face-to-face events. Marketing director at corporate financial advisers, Livingston Partners, Andrea St. Hill, also cites strengthening client relationships through sector-focused conferences and corporate entertainment as the way forward.
Industry reports will no doubt continue to present a mixed bag of marketing spenders and savers. In any case, everyone agrees that there is no prospect of a return to the good old days and marketers should remain focused on measurement and ROI.
What remains to be seen, however, is how this emphasis on investment and profit will marry with social media – a channel whose ROI is notoriously difficult to measure.
