ThinkTV recently hosted a presentation led by Rob Brittain, an advertising effectiveness consultant.
The ThinkTV presentation explored how the advertising industry is likely to be affected if there is an economic downturn next year and how marketers should respond if it does happen.
Brittain began with a slide showing ad spend moves with GDP from January to September.
January saw the biggest growth in ad spend with +15.4%, although there was a slight dip in February and March. Ad spend bounced back in April to +5.5% as a result of the Federal Election.
As spend growth from July to September was robust, going from -4.2% before jumping up to +6.6% in the September findings.
Brittain noted in the ThinkTV presentation that the post-downturn winners were those who mastered the balance between cutting costs to survive today and investing their capital in the right areas to grow tomorrow.
Defensive strategies included a strong focus on operational efficiency and a reduction in administration costs. Meanwhile, offensive moves included an increase in customer preference through investment in R&D, new products and advertising, as well as maintaining price and investing in assets.
Increasing advertising share of voice was found to be a drag on profitability during a downturn, according to Brittain. He also noted that it aids significantly faster profit growth during the recovery.
Brittain added that during a downturn, focus on short-term demand conversion is a “fool’s errand” as the current demand pool shrinks.
If there is a downturn in the market, Brittain noted five things smart marketers will do:
1. They won’t pull all ad spend
2. They won’t accept a decline in SOV as an outcome
3. They will see the downturn as an opportunity for growth
4. They will exploit weakness amongst their competitors
5. They will strike a balance between demand creation and demand conversion
Rob Brittain is an Australian advertising effectiveness expert and independent marketing consultant. He is also a strategic advisor to CMOs, focused on enabling enterprise-wide marketing effectiveness capability.
Brittain is co-author of the Australian Advertising Effectiveness Rules alongside the globally renowned Peter Field and the 2020 report Winning or Losing in a Recession.
Prior to becoming an independent marketing consultant, he led marketing effectiveness at ANZ Banking Group and marketing analytics across Asia-Pacific for Mondelez.
Top image: Rob Brittain