Recession strategies often flawed, say effectiveness experts

05 June 2009

LONDON/WASHINGTON: The "corrosive pressures of recession" have increased the emphasis on marketing accountability, but can also lead brands to adopt strategies that are "often wrong about what is wasteful and what is good for effectiveness," a new study published in Admap has found.

Updating their analysis of 880 case studies submitted to the IPA Effectiveness Awards, entitled Marketing in the Era of Accountability, Les Binet, of DDB Matrix, and Peter Field, a marketing consultant, argue that using the wrong metrics to measure success is not a new problem. (The full article is available to WARC subscribers here.)

As far as marketing is concerned, one of the main impacts of the economic downturn is that "what was once driven by best practice is now driven by necessity."

While this situation is a necessary one – as "if marketing is asking business to dig deep during troubled times then the quid pro quo must be greater accountability" – it can also lead to sub-optimal outcomes for brands.

One of the major failings of marketers operating in such a climate is focusing on excessive price promotion, a tactic which is founded not on enhancing effectiveness, but on driving a short-term improvement in sales.

Indeed, data from the IPA papers suggest that while these initiatives give the "impression" of doing the right thing, they actually run counter to a brand's short- and long-term goals.

This is because heavy discounts undermine both previous value-adding efforts and company profits, while consumers also "come to expect deals, and price sensitivity rises."

Wide-ranging budget cuts may also not prove the answer, and where reductions in spending are possible, these should be proportionate, in order to ensure that a brand maintains its "share of voice" in a particular category.

Summarising this approach to budget management, Binet and Field said that "if a brand's competitors are cutting theirs, clearly it is possible to cut the budget without losing" overall share of voice.

However, they also warn that "it would be wise" to make sure that a product's key competitors are not maintaining or increasing their outlay, which would lead to them increasing their share of voice and, ultimately, their share of market.

Among Binet and Field's other recommendations to marketers are to use TV, which “works slightly harder during downturns," and to try and maintain emotional engagement with consumers rather than solely focusing on price.

To read more about Les Binet and Peter Field's discussion of marketing accountability in the downturn, click here.

Data sourced from Admap; additional content by WARC staff