How marketers can tackle the polycrisis

Faced with global food shortages, soaring energy bills, the after-effects of the pandemic and a looming recession, marketers need to fight the urge to reduce costs, says the CEO of Analytic Partners, who argues that “cut your media spend, and you’ll cut your ROI”.

Nancy Smith, in a talk at Cannes Lions, explained that the message from the measurement and marketing analytics company’s data was clear: “look to the past to inform your future and don’t go dark in times of crisis.”

Past learnings

Analytic Partners’ ROI Genome has shown that:

• Recessions do not mean lower ROIs – 54% of brands saw ROI improvements during the last recession.
• Recessions do not mean diminishing returns – of the brands that increased marketing investment in the last recession, 60% improved marketing ROIs.
• Media drives growth – brands that increased media investment realized around 17% growth in incremental sales.
• Media helps brand building – 52% of brands that increased marketing investment saw year-to-year ROI growth over a two-year period.
• Reducing media investment exacerbates losses – on average, brands that reduced media investment suffered an 18% loss in incremental sales.

(Read the ROI Genome Intelligence Report on The Advertising Evolution here.)

Two golden rules 

During a period of media inflation there are two golden rules for brands, according to Smith: 

• multi-channel approaches are the most effective; 
• the halo effect – how advertising one product boosts others in your portfolio – is significant.

“Media investment can lessen price sensitivity during times of price increase,” she said. “We have seen that brands with high media investment in media are experiencing a lower sensitivity to price increases, less loss in sales.”

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