Why CMOs must commit reasonable budgets to brand advertising in 2021 – Ronan Redmond
By Ronan Redmond (voted The Outstanding Media Personality of The Year by MARKETING EDGE).
The out-going year 2020 has taught us to expect the unexpected. However, I am optimistic about the year ahead and especially for Nigeria’s Marketing and Advertising sector. There is hard evidence that shows how challenging a year 2020 has been for marketing and advertising budgets.
According to WARC, 2020 was the most hostile year for the advertising economy ever seen in 40 years of market monitoring. Global advertising spend is on course to fall by 10.2% from $63.4bn to $557.3bn in 2020, WARC Data predicts, as traditional media will have their worst year on record. The trend in Africa is much the same with advertising spend down 23.3% to $5.0bn this year, with a slight 2.1% rise expected in 2021 as key markets start to recover from sustained recessions. Many industries face significant economic headwinds and have been forced to cut considerable amounts of marketing and advertising spend as a result. The travel, entertainment, automotive and restaurant industries will be among the most affected.
CMO’s will now take stock and armed with the hard data they will begin to build the case for investing in more marketing and advertising to reclaim lost sales. However, as brands and sectors look to emerge from 2020, they will continue to contend with unpredictability, including the impact of broader economic and global factors.
In setting marketing and advertising budgets for 2021, I advise that all CMO’s must be brave and ambitious. CMO’s must set out their case for their annual budgets and then maintain their positions when making any budget justifications within their own organisation. This will not be an easy position for the CMO to hold especially as other heads of departments within their business will also pitch for more resources thus further putting the spot light on any budget set aside for marketing and advertising. CMO’s will need to fight their corner and remind their colleagues of the importance of marketing and advertising in delivering: customers, sales and revenue to the business. It has been said that good marketing is “the art of telling stories so enthralling that people lose track of their wallets.”
In this era of media fragmentation CMOs should understand that good storytelling, marketing and advertising with cut through, requires the appropriate investment in the right media mix. However too often during a crisis such as the Covid-19 pandemic and the economic downturn that follows, business leaders will instruct CMO’s to cut spends prior to finding other savings from operating expenses in the business. This reduction in marketing and advertising spend is despite evidence which clearly shows that continuing to spend on marketing and advertising during challenging times will maintain market share and position the business to benefit in the upturn which history shows us follows each economic downturn.
Unfortunately in my experience, the role of the CMO in many organisations has become undervalued, possibly at the expense of other disciplines and business units such as operations, logistics, and production. CMO’s are losing influence around the management table when decisions are made about operating expenses for the year ahead. Without a strong voice at the management table it becomes too easy to cut marketing and advertising budgets. In my opinion and in the months ahead, consumers and brands will continue to turn to media they can trust. Covid-19 has proven the power of traditional media channels TV and radio who both witnessed an increase in audiences as people tuned in to keep up to date with the news, and keep entertained in their homes.
During the pandemic, television and radio were both elevated in terms of importance and ability to connect mass audiences and especially with customers quickly. I believe CMO’s have had a good reminder in 2020 of just how strong each traditional channel remains. Audiences returned to TV and radio in force when Covid-19 hit and clients have returned back to TV and radio in the final quarter of the year, because each medium delivers meaningful and measurable results. The year ahead will be a pivotal year where television and radio will prove, once again, that it is the best way to capture mass audiences in a fragmented landscape. Demand will continue for TV and radio because brave and ambitious CMO’s will appreciate that in order to justify the necessary marketing and advertising spends. It is better to invest in the proven media which will deliver the desired results effectively and efficiently. Reasons indeed for CMO’s to be brave and ambitious and fight for their budgets.
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