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Intelligence Briefs

The next year for marketers, media and agencies is rather bleak...unless

Industry Contributor

Sunita Gloster, Chief Customer Officer

26 August 2019 2min read

Reducing marketing overhead has become the standard approach for troubled brands following the 2008 recession. The belief remains that companies can turn marketing on and off when faced with financial challenges. Marketing is tarnished as a cost centre, versus one that drives profits. Alarmingly, as talk of an impending economic downturn begins to take hold, marketing is in the bullseye for a workover (DigiDay).
Key points:
  • Slicing and dicing marketing overhead has become the go-to approach big brands like P&G, Unilever and General Mills amongst others, have deployed in recessionary times. Cutting working media, slashing agency rosters and tasking procurement to put cost-cutting above all else.
  • Despite war stories like Sears and Kraft Heinz, the c-suite hasn’t been dissuaded that marketing equals overhead. The value and power of the brand is still undervalued in the boardroom.
  • With the industry addicted to the futility of re-thinking the CMO role, responsibilities and title (Ritson was half-right remember) there remain a lot of questions about what ‘good marketing’ is at board level. 
  • Analysts believe brands will have a hard time keeping a big marketing team in house. Advancements in technology will deliver natural efficiencies with handling of menial repetition or data based tasks, and in a  world where agile is the emperors new clothes, its hard to get a big army to be agile.
  • But overlay the impending recession and the next 6-9 months will bring a major recalibration of marketing teams. Uber and McDonald's are the first announcements of many reflecting marketing getting lean.
  • Focus on the customer experience and tactics that are driven by a technology and data centric approach and proof-point, in the short term are changing the marketing remit.
  • The conundrum is how to organise and how to determine the right internal marketing structure to drive growth in a market that’s incredibly hard to navigate. 

My Takeout

Despite the emphatic case for long-term brand building being waged by marketers and academics, the bellwethers that surround the marketing function, coupled with an impending economic downturn, should send shivers through the supply sector. It's time to assume the brace position.

What might look like fractal events on the outside are growing challenges for the CMO, the marketing function and the marketing brand itself.

The headlines that flood the c-suite from Harvard Business Review, Forbes, the consulting and strategy houses, and  those that measure CMO tenure dramatise a significant fracture in the confidence and purpose of marketing - fractures that reverberate sector wide, impacting agencies, media owners and  tech providers.

Elevating the respect for marketing is a pledge many of us have signed up to, but the certainty of recession  throws a curve ball. Morgan Stanley has already declared an advertising recession. Most are asking when and how, but not if. 

We know the tightening has begun. Corporate Australia is intently focused on cost reduction, new operating models and large-scale transformations. It's everywhere. Improving productivity, AKA doing more with less, and the postponement of investment are already visible. They're early indicators of recession-proofing. 

The question is what role does marketing play beyond short term activations in driving the corporate growth strategy through an economic downturn and in a market that is already incredibly hard to navigate. Or, does the economic overlay just exacerbate the focus on short-termism? 

It's been said before, many times over. The only thing that will stem what appears to be marketing’s death by a thousand cuts is to first deliver a robust case for investment that demonstrates material contribution to the business case - both predictive tech and robust post analysis on which marketing investments are doing the heavy lifting for business growth.  Nothing else matters.

The line that has to be struck from the global marketing narrative first, in the most public of ways, from the world's biggest brands is this: "Marketing departments have trouble attributing their work and showing how it impacts a company’s bottom line".   

For all of us that cohabit under marketing's roof, it's imperative that marketing shakes its headlines as a cost centre,  addresses attribution and wrestles itself from those that are pushing a short-term agenda. If we don't and with the chill winds of recession whistling around our ears, now will be the beginning of the longest winter of our discontent.

Let’s go. What do you think?

Industry Contributor

Sunita Gloster, Chief Customer Officer

Sunita Gloster is the Chief Customer Officer of WPP AUNZ.

She has 27+ years experience in the media and marketing industry both locally and internationally, having held senior leadership roles with global advertising agency networks and having worked with the marketing, media and consulting sector.

Her significant  roles include Worldwide Business Development Director for Lowe Lintas,  Chief Operating Officer for M&C Saatchi Europe, Director at PwC’s CMO Advisory, and CEO of the AANA where she drove a strong industry agenda that inspired and equipped brand owners to embrace the growth agenda.

Sunita has been widely recognised for her industry contributions, having been voted as one of ‘Top 35 Businesswomen under 35 in the UK’ for two consecutive years by Management Today. Since returning to Australia, she has been part of B&T’s Top 30 Powerful Women in Media for the last 5 years.