As businesses around the world begin planning their post lockdown return, there’s one thing on the lips of marketing leaders. How do we reduce expenditure? In fact, 65% of CMOs report that they are bracing for moderate to significant budget cuts due to coronavirus-related disruption. With revenues down and consumer behaviours changing, it’s time to review strategies and implement a cost optimization plan.

In this article, the Moondust team is looking at how to thrive on a cut marketing budget. What should stay, what should go and what should you introduce to the marketing mix?

Photo by StellrWeb on Unsplash — Photo by StellrWeb on Unsplash

How Have Marketing Departments Been Affected?

· Only 7% of 477 UK brand marketers say they ‘seized the opportunity’ to invest more in marketing during covid-19

· CMOs in North America and the U.K. report they will look to make cuts in TV advertising (32%), offline advertising (32%) and event marketing (28%).

· Google and Facebook will lose more than $44 billion in worldwide ad revenue

· 69% of brands expect they will decrease ad spend in 2020

· 57% of those surveyed said they had decreased budgets due to the virus outbreak

· Analysts suggest the U.S ad industry could lose almost $26 billion

· Cost per 1,000 impressions are down and cost per click is flat or down

· Of 35,000 surveyed consumers, only 8% thought brands should stop advertising. However, consumers do believe advertisers should take a different approach.

#1 Assemble a Tiger Team

When an oxygen tank exploded during the Apollo 13 mission, NASA swiftly formed what it later called a “tiger team” pictured below. That is, a group with different areas of expertise to investigate the issue and figure out how to get the four astronauts home.

Tiger teams are made up of individuals with a strong knowledge of the subject and a unique skill set. CMOs and marketing leaders should create a tiger team and empower them to make strategic decisions on direction and budget. The team should be small and agile and where possible consist of internal team members. Here are some actions they should undertake before making any cuts:

· Analyse the data before and during covid-19. This includes data from social media, Google Adwords, Analytics and importantly, company sales and profits. It should also analyse specific product sales noting any increases or drops.

· Assess the company’s target audience. How have they been affected? What is their current need or pain point?

· Review the company’s current marketing methods. For example; if your company is paying to advertise in airports or inflight magazines this may now be considered an outdated marketing channel.

· Compile a list of all spending planned for the remainder of 2020. Include marketing, advertising, vendor agreements, communications, meals & entertainment, vehicle expenses, software, subscriptions, signage, postage etc.

· Create a written report on changes in spend, consumer behaviour or demand. This report needs to be based on data as opposed to intuition. The report should also include fact-based suggestions on reducing budget and adjusting strategy.

#2 Start with Easy Cuts

It can be tempting to look at your marketing spend and cut the biggest things first. But in fact, this could lead to problems further down the line. It’s best to start with easy cuts. This means removing services you don’t need or, can do inhouse. Often you will find that you have been paying for services you don’t even use.

Here are some examples

· Cancel in-person events and replace with Skype, Zoom or webinars. Whilst your company has probably switched to online meetings already, have you looked at upcoming travel arrangements? Travel and accommodation can run into thousands and drain your marketing budget.

· Consider Expo Costs. Expos are an expensive business for exhibitors. Costs include booth, booth design, giveaways, printed materials and then travel and expenses for team members. Whilst expos are likely to be running again next year, now might be a good time to assess whether you want to include them in your budget.

· Analyse the marketing tools you’re paying for on subscription. Do you need and use them? Be sure to check with all team members before you cancel them.

· Review PR placements. Is now the right time to be firing out PRs about your company awards and your CEO’s daily fitness routine? PR can add huge weight to your budget so be sure you can justify the spend.

· Assess External Agencies. External PR, marketing and analytics agencies and vendors can be an integral part of your team. Or a dead weight. If your external agency is providing content and social media marketing, then you probably need to keep them. But if they are managing paid spend which you decide to remove, you may want to pause their services or renegotiate terms.

· Carefully consider print costs. With concerns over hygiene and many consumers on lockdown, magazines and newspapers are simply not being read. Analyst Jack Myers forecasts a fall of more than 16% percent for the industry. If you are advertising regularly, aim to negotiate a discount and review circulation stats

#3 Reduce Advertising Spend

Now you’ve decided on your easy budget cuts, let’s talk about your ad spend. Ewan McIntyre, research director at Gartner stated:

“I say it’s time to go beyond pouring money into Facebook Ads and banner ad campaigns. It’s time for CMOs to invest steadily in regular content creation (outside of just blogging!), adopt new strategies and refine their existing operations.”

We agree. Don’t stop your paid marketing without first strategising. But, be ready to review, change or pause ads. 69% of advertisers expect covid-19 to have a significant impact on their ad spending in Q2 2020. Here are some ways you should adjust your ads.

· Pivot your messaging. 29% of marketers say they are making more investments in brand values, for example through charity donations. You should also review copy and imagery to avoid images with people in groups or touching. A study by Pattern89 has noticed 27.4% fewer image and video ads on Facebook and Instagram depicting models displaying human interaction, such as hugging or shaking hands.

A great example of this is Visa. Visa had 80% of its Olympics creative ready to go before the games were postponed earlier this month. So, they pivoted to film athletes at home instead.

· Review Keywords. Are your search keywords still performing the way they were at the beginning of the year? Consumer search habits and requirements have changed so be sure you’re not spending money on irrelevant terms.

· Seriously Consider Celebrity Endorsements. Before coronavirus, celebrities were followed and adored by many. During coronavirus, that feel-good sentiment turned bad with celebrities are singing lyrics like “imagine no possessions” from their mega mansions as unemployment rose. We are big fans of relevant micro influencer marketing which costs 1.5x less than macro-influencers and 7x less than celebrity influencers on Facebook, Instagram, and YouTube.

· Reduce Paid Spend. The biggest losers in the marketing arena right now are display advertising, with a 47% reduction in budget spend and paid social media which suffered a 45% drop. This is due to several factors including; trying to pivot to new messaging, needing to reduce outgoings or simply that the ads are not performing in the current environment.

· Check Sponsorships. Another area you should consider cutting is sports-related advertising. 77% of firms declare they have no intention to advertise during football in any form right now. If you do have a sports sponsorship, review the terms, and look to get additional digital extras.

#4 Increase Your Organic Marketing

So, you’ve made some cuts to your budget. But you still need to maintain your market share and sustain your employees through this tough time. Cutting your marketing budget doesn’t mean you do less marketing. It means you increase the organic side. Here are some ways to do that:

· Focus on Great Content. Exceptional content for your blog, social media and guest posts should always be a key focus. Now is not the time to cut anything to do with content marketing. You could introduce some user generated content to your marketing mix. This is cost effective and 85% of consumers find it more influential than any form of brand content.

· Repurpose Old Content. Repurposing your best content is a cost-effective way to keep your blog traffic flowing. Just be sure that the content is evergreen and sensitive to the global mood.

· Ramp Up Organic Social Media. Consumers have spent more time on social media than ever before throughout the lockdown period. In fact, since February, the number of active Facebook users aged 25 to 34 increased by 1 million They may not be clicking on ads, but they are following their favourite brands. Think about online competitions, clickable content, behind the scenes photos, staff interviews, company updates and incentives like free delivery. Keep up with customer messages, comments, and questions too.

· Invest in Video. Global Web Index found that over 80% of consumers in the U.S. and UK consumed more video content since the outbreak, with YouTube and TikTok being the main channels. Video doesn’t have to cost anything with some of the best Tiktoks being done by employees inhouse.

· Create a Referral Offer. Ask your loyal customers to refer a friend and incentivise them with offers or discounts when they do. Pinterest, Instagram and Facebook are great platforms to facilitate your offer.

· Keep Up Your Email Marketing. Email marketing continues to shine, even throughout the current pandemic. Email open rates have risen by 25% week-on-week in retail and daily email open rates are increasing by 5-10% each week.

We hope we have laid the groundwork for you to thrive on a cut marketing budget. Talk to the team at Moondust , Belgium for content and social media marketing support. Enjoyed reading How To Thrive On A Cut Marketing Budget? Please hit the share button.