Taking risks and the long-term view were top themes at London's recent MAD//Fest marketing festival. The two go hand-in-hand – playing safe is rarely genuinely safe in the long term. As the clouds of recession broil on the horizon, marketers will need to be bold. They will need to take risks, and they'll need to defend those risks to their Boards.
A global recession seems almost certain. In June, the World Bank said "a recession will be hard to avoid" for many countries. The Financial Times quotes S4 Capital's Martin Sorrell saying, "Global slowdown is at the top of everyone's agenda. People have to plan for a tough 2023."
Marketers must prepare for "dark times ahead," according to Marketing Week's Mark Ritson. Inevitably there will be pressure to cut marketing budgets and especially, as Ritson observes, to cut long-term budgets like brand marketing. Certainly, marketers will need to ensure campaigns and activities either boost performance and make money or improve efficiency and save money.
But how do marketers do this? In a downturn, brands need to take more risks, not fewer. They must try new things, looking for new sources of revenue while maintaining their capacity to rebound when the recession's over. As Rory Sutherland, vice chairman of Ogilvy UK, put it recently:
"Times of desperation cause real sources of innovation."
Marketers will need to be brave and take measured risks. Choosing the best metrics and measurements can help guide their risk-taking and defend their performance to senior management.
Taking risks is necessary, but they need to be measured, not blind. A basic technique in boxing is 'stick and move'. It means planting your foot solidly to give your punch maximum force, then stepping quickly away to avoid the counterpunch to assess the effects and ready yourself for your next move. Similarly, as a marketer, you need a solid understanding of what your activities are achieving against the competition… while they're still in motion. Historic, lagging indicators don't help. At any time, but especially under pressure and scrutiny, you need the ability to pivot quickly when the results are not what you expected. You need to optimize the successes or shift away quickly when you hit an irredeemable failure.
As a CMO, you need a holistic understanding of your team's expenditure and performance across every sub-brand, campaign, and channel. With that in place, you can:
· Carry learnings across tactics and across time, improving your team's performance and knowledge, and
· Communicate (and defend) performance, in terms of business outcomes, to the CFO, CEO, and the rest of the leadership team.
Effective communication is critical when the pressure's on. Yet, this year's CMO Survey found that only 4 in 10 marketing leaders can say that their CFO is aware of and aligned with digital marketing KPIs.
Where data sharing is not well-established, it's the CMO's job to explain marketing activities and risk-taking campaigns to the CFO. Retail pharmacy Boots' CMO Pete Markey believes marketers must create a narrative around marketing to help demystify it to other functions. This helps finance "want to get it," says his CFO, Michael Snape.
But that narrative needs to be in the board's language rather than the marketing department. As a CMO, you need to talk investment and return, not clicks, likes, and shares. Optimizing spend in relation to overall business goals rather than departmental or channel targets, meaning you can show your CFO the value of the risks you're looking to take.
A great example of this came from Domino's CMO Sarah Barron when she recently discussed the results of Dominos' 2021 yodeling creative. The brand took a risk with their hugely successful yet divisive yodel campaign linking Dominos to "reunion moments" as people started getting together again after the Covid lockdown. Borne of customer insight and carefully measured, the campaign divided its audience with 95% loving it and 5% hating it. Yodeling ads regularly appeared in "ads you hate" listings.
But it cut through the noise, as demonstrated in its results. The campaign yielded:
· 16% increase in orders
· 39% increase in franchisee spend,
· a reach of 10 million on TikTok,
· an ROI of 8%.
These results enabled the marketing team to create a spin-off Christmas campaign – a season the brand had never approached before. Risks were taken, and the reward was great, with the help of the right metrics to keep stakeholders focused on the value generated.
As Dominos demonstrates, marketers need consistent, meaningful metrics. Meaningful, because they must relate to financial performance and business objectives. Consistent, because they need to enable benchmarking, and year-on-year or month-on-month performance tracking, across different channels.
Combining the right metrics with real-time reporting helps you remove unwanted risk. Using the right metrics means you can run small-scale tests, adapt and iterate. If they work, you can do more. If they don't, you can stop, and you haven't lost much.
For the dark times ahead, the light of insight will be essential for marketers.
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