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| Fortune Favours The Brave |
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Rising costs and weaker consumer demand will combine to push down next year’s economic growth to the lowest rate since 1992, according to the CBI, but what does that mean for marketing budgets?
If what the CBI says is true – and we believe them not simply because they are a client but because we are members of the the UK’s biggest employers’ group – should we all shut up shop and buy a croft in the Outer Hebrides? Or should we start comfort eating, something I’m sure Marks & Spencer would welcome given its recent profit warning.
Surprisingly, my considered opinion is a resounding ‘no’, but that doesn’t mean many businesses won’t look to trim marketing costs in the short term. According to Proctor & Gamble, a global business that knows a lot about marketing strategy and brand building: ‘When the going gets tough, the tough build share’ and that’s exactly what businesses need to do. The question is – how best to do it?
Industry commentators and marketing experts suggest that the smart money should be invested in PR or online marketing and search engine optimisation, rather than the traditional routes of advertising or exhibitions, to deliver a better return.
History would suggest that fortune does favour the brave – and going on the offensive and marketing your business out of an economic downturn is arguably the optimum thing to do, and has been proven to work.
As well as being brave, you also need to have the right strategy and Maxim is experienced in extracting the maximum value from a tight marketing budget. The key is understanding what a business is trying to achieve – and implementing a clear brief and delivering consistent messages to a clearly defined marketplace.
Research by Metrica, an expert, award-winning, global media analysis and evaluation company, has shown that PR is typically ten times more cost effective than advertising and 300 times more than direct marketing. Add to this the value of independent and third party endorsement that editorial brings and there’s a strong case for diverting marketing spend towards PR.
When assessing the value of PR, the simplistic route is ‘advertising equivalent of the space secured’. However, it’s much more important to try and assess, as Metrica does, how favourable the coverage was, whether it conveyed a company’s key messages, readership by the target audiences and links it to actual new business generated.
So, looking into the proverbial crystal ball, what can we expect? There will no doubt be a brief upward spike in traditional advertising spend and then a sharp drop. In fact I think Trinity Mirror has already experienced the latter, with its shares plunging 28% in a day after it announced profits would be 10% lower than expected. The group, which owns national newspapers including the Daily Mirror and a 150-strong regional stable, reported a 12.6% year-on-year fall in underlying advertising revenue during May and June and said this trend was expected to continue for the rest of the year.
There’s no denying that advertising has a role to play, especially online media spending. However, today a company’s marketing can be much more targeted which, when combined with the editorial integrity delivered by PR, can transform a business at a fraction of the price.
The danger is that once traditional advertising media fails to deliver the all-important return on investment, many may have blown their budget and be forced to shut up shop in terms of marketing, which could sound a death knell for weaker companies.
So what approach should a company adopt. Definitely not the ‘eggs in one basket’ method, but one which looks to exploit all the marketing channels: PR, e-marketing and internet, events or direct marketing.
The first job is to sit down with an ‘impartial expert’ and identifies the challenges a business faces and how best to tackle them. And, not surprisingly, Maxim would be happy to sit down with any business to help develop – and implement – a marketing plan. It’s what we do best. |
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