Carl Sarney Head of Strategy at TRA offers unique insight from a roundtable discussion involving a group of Chief Marketing Officers from around Auckland.
“Eat the elephant one year at a time.”Mark Ritson
This is how Mark Ritson answered the preeminent question in a room of Auckland’s top CMOs. How do you keep the rest of the c-suite on strategy (particularly the CFO) when making long-term bets on an uncertain future?
I’m paraphrasing the exact question, but this is essentially where the conversation landed after a thought-provoking presentation Mark gave us on what’s changing post-2020, and more importantly, what’s not.
Covid-19 has brought about some wide reaching constrictions on people’s behaviour. We can’t go on overseas holidays for example, and we can’t take public transport without wearing a mask. While some New Zealanders are optimistic about the future, almost a third of us are concerned about losing our jobs.
As we’ve seen from community outbreaks here in NZ, and continued lock-downs in other parts of the world, these constrictions aren’t going away any time soon. But the word ‘constriction’ is carefully chosen – eventually, shopper behaviour will become unconstructed. The question is when?
Where initially ‘the new normal’ referred to living our lives in isolation and shopping online, the long-term new normal won’t eventuate until the virus has passed and these constrictions are fully lifted. At the earliest, that could be 2022.
That means for 2021 everybody (including marketers) have to make do with this constricted way of living. This calls for the right mix of agility and strategy where timelines get split into more distinct short-term and long-term horizons.
Above all, marketing strategies need to be geared to recessionary behaviour.
Paymark spend trends show significant dips in spend during NZ’s first national lockdown, and again during Auckland’s lockdown in August. While spending picked up after the lockdowns, there has been a gradual YOY decline since the wage subsidy ended on September 1, 2020.
What’s not changing?
The encouraging news is, we know how to deal with recessionary behaviour. Mark’s main message, as always, is to stick with marketing theory that works.
Maintain marketing spend. “Big brands with deep pockets will win big”. This truism may not be comforting for every marketer, but however deep your pockets are, the key is to invest the money you’ve got in the places it’s proven to work. This is where CMOs need to step up to prove their c-suite chops. “CEOs and CFOs care about dollars, not marketing.”
The advice here is to “Be the one that’s closest to the market, and be all about growth”. Being all about growth means “make sure every bullet point ends in a $”. Use the evidence out there, such as Field & Binet, to demonstrate the expected return on marketing investment, and prove the case for maintaining spend to achieve long-term growth out the other side of current recessionary behaviour.
Innovation and NPD should definitely remain part of your strategy. An innovation pipeline can continue to run in parallel with the long-term timeline of constricted shopper behaviour. Meanwhile, kill weak brands and trim your brand architecture. “If you launch a new SKU right now, kill another one that sucks” Look at profit contribution in order to identify the brands to cut, and focus your marketing investment on the brands that work.
This is another example of dollar signs at the end of every bullet point. Several of the CMOs I spoke with on the night were doing this. Have one single minded positioning statement for each of your brands, and focus your marketing programme on cementing that positioning in the minds of your market. This point answers another common question in the room – do we need to reflect Covid-19 in our advertising and marketing?
In general, the answer is no. “Customers don’t care what your brand thinks about Covid.
Just get on with reminding people what your brand’s core role is “If you have an effective campaign, keep running it”. A great local example of this is Speights ‘The Dance’ it first aired in early 2018. Nervous marketers might have pulled it in 2020 for fear that it goes against social distancing rules. Speights knew better and kept it on air, going on to win the Grand Effie for 2020.
One more crucial piece of marketing theory not to lose sight of amidst your agile navigation of this crisis is codifying everything with your brand assets. The cleverest campaign is worth nothing if it’s not unmistakably linked to your brand. Here we’re talking about codes like Speights distinctive blue and orange bottle, KFC’s red & white striped bucket, Lotto’s yellow ticket, ASB’s Big Ben character, Greg Grover from Nova, McDonald’s ‘pa ra pap aap ahh’ jingle and of course, Pak n’ Save’s Stickman. Don’t let your sales pitch get in the way of an entertaining story, but don’t just rely on a logo at the end either. These brand codes should be woven (not shoehorned) into every ad, activation, and social media post that you do. Furthermore, carry these codes established in ATL activity through to your website, POS, packaging and other touchpoints. Maintaining spend over the long-term only gets results if people know it was your brand that was talking to them.
Sell it as a 3-4 year journey
As you can see, the emphasis is very much on long-term thinking and this prompted the question; what should the shortest brand plan be, and how often should we revise our plans?
The answer: “A plan should encompass what we know at the moment … work it out with the CFO one year at a time”. Within these planning sessions, CMOs will need to continually protect marketing investment “for 3-4 years or it won’t look like it’s worked”.
If you’re not able to continue running an existing campaign that’s already working, this is how the next three years might look:
Year one: “you won’t see anything because we’re working on fixing it”
Year two: “you’ll see better marketing, but not results yet”
Year three: “you might start seeing results”
The evidence is out there to help CMOs explain how a journey like this will work. Cautious shoppers will tend to default to familiar brands that they trust. By maintaining a strong presence throughout these constricted times, your brand will have the built up an advantage over competitors who cut back, helping you accelerate out of the corner in 2022 and beyond.
This article is reproduced from notes taken at the first Marketing Association CMO Forum on October 12, 2020.