a makeshift structure with several brand logos.
PHOTO: Universidad EAFIT

Last year, most marketing managers didn't think budget cuts were on the horizon for 2020. In fact, according to the Gartner CMO Spend Survey 2019-2020 released in October of 2019, only 18% of survey respondents believed they’d have to deal with budget cuts within the next year.

Of course, no one could have predicted a few months later those same marketers would be faced with the COVID-19 world health pandemic. Marketers naturally are dealing with a different playbook: pushing out content with different tones, debating on campaign timing or maybe even more drastic measures like marketing with a smaller team and reduced budgets. Most giant advertisers are skipping out on ads or delaying campaigns, after all, according to the World Federation of Advertisers report this month. It found 81% of marketers from major multinationals will postpone planned ad campaigns, and 34% are going with one- to two-month delays. Airbnb cut its entire marketing budget to save $800 million.

Recognizing What’s Essential

It’s likely a time for many marketers to look for ways to reduce spend. “The prudent thing to do in any economic crisis is to make sure that spending is controlled and in many cases reduced,” said Anita Brearton, founder and CEO of CabinetM, which helps organizations manage and use marketing technology use and spend.

“In marketing that means making sure that you have the essential set of programs, people and technology in place to support current needs and that the foundation is there to fuel growth as the economy recovers.”

Related Article: Marketing in a Time of Crisis

Addressing the Obvious: Cutting Back on Offline

This is an unusual time in that the economic crisis is not just a fiscal one, but is being driven by a pandemic which is changing consumer behavior and the way they purchase. For marketers this adds another layer of complexity, according to Brearton. But it also means making sure you've got a grasp on cutting some obvious expenses. “In this changed environment the obvious place to cut is offline marketing expenses: events, billboard advertising and direct mail,” Brearton said. “Once we head back to the office billboards and direct mail will make sense again. It’s too soon to project how long it will be before we all feel comfortable attending large events again. Once you get beyond the obvious, the focus should be on refining what’s in place.”

How Will Your Consumers Feel?

Price Glomski, executive vice president of digital marketing agency PMG, said one of the most important questions to ask about marketing during a crisis, downturn or cultural moment is this: Will employees, associates and partners behind your brand be positively or negatively affected by the marketing decision at hand?

And that leads to a question of customer propensity. Glomski cited the take of Marc Vermut, vice president of marketing solutions at Neustar, who wrote this month in AdExchanger, “Propensity modeling becomes particularly valuable in uncertain times because it answers a core marketing question: On a scale of zero to 100%, how likely is a consumer to purchase a product or take a particular action? And what will make them more likely to do so?” 

According to Glomski, these questions also matter regarding the consumer when deciding to invest in marketing: Is the brand differentiated given the circumstances? Does the advertising strengthen the customer relationship or take advantage of it? Does your current customer base see the brand as appealing or essential given the times? “In most categories, and particularly during a crisis, people want to believe they are making the right purchase decision,” Glomski added.

Related Article: How CMOs Are Leading Through the COVID-19 Crisis

Don’t Abandon Creative Work 

Although a lot of creative has already been shot and produced for the remainder of the year, some brands are reconsidering their creative work for the second half of the year, according to Glomski. It doesn't mean all creative work has to be abandoned. “Spend the money,” he said, “on more time-sensitive, dynamic and intentional creative, spending time in creative ideation to ensure the results stand out. Creative thrives in downturns due to the necessity of agility, redefinition and cultural shifts.”

Get a Handle on All Things Marketing Tech, Skills

Brearton said she continues to be amazed at how many companies don’t have a handle on all of the technology they are using, the skills of their marketing team and the performance of their programs and campaigns. “Without that knowledge I don’t know how you make sensible decisions about what and where to trim,” she said. “Having the big picture, it becomes easy to identify redundant products, contracts and functionality.”

Assess your internal proficiency skills to identify training needs. “One of the big issues in today’s marketing environment is that platforms aren’t fully utilized which impacts performance and ROI,” Brearton said. “One of the key reasons for that is lack of skills. With all of us now working from home this is an excellent time for marketers to do some online training. Better platform utilization will lead to better performance, and, if it doesn’t, then the platform value needs to be assessed.”

Lessons from the Airbnb Marketing Move

Is your company considering a total marketing cut? After all, there is the Airbnb playbook there, as we mentioned earlier. Ana Andjelic, strategy executive and Doctor of Sociology and author of The Sociology of Business, co-authored a piece in Fast Company April 15 on the Airbnb move, with Jessica Davidoff, a serial entrepreneur and founder of growth and crisis management consultancy Sprezzatura.

Airbnb, an apartment- and home-sharing service that has shaken up the hospitality industry, didn't totally cut off marketing communications. An email went out Sunday morning, April 19, demonstrating how hosts are helping frontline workers among other promotions.

Still, Andjelic and Davidoff wrote that by initially cutting marketing Airbnb made a mistake. "There’s a lesson for all brands here," they wrote. "How they allocate their marketing budgets at the moment (and how much they cut them) should reflect the shift from spurring demand to maintaining the customer relationship. Otherwise, marketers are in danger of losing the connection with their customers, as the Airbnb ordeal shows. Marketing cuts deprive a brand of any still existing sources of revenue, like through email marketing or social commerce. They also fail to mitigate the damage of a negative impression."

The authors noted Airbnb later secured a $10 million relief fund for “super hosts” and now provides $5,000 for affected hosts and will cover 25% of cancellation fees for hosts. "Regardless," they wrote, "all the public can think of is a very human and relatable image of a host shaking with raw anger. A proactive and empathetic marketing action would have helped to balance this message out."