May 01, 2020
It didn’t take long for Google to take a hatchet to the marketing department, slashing the budget by half for the second part of this year and putting in place a hiring freeze, reported CNBC. The tech giant is following an all-too-common corporate response to an economic crisis.
Marketers can argue until they’re blue in the face about such foolishness, especially when customer relationships hang in the balance, but the chief bean counters almost always see things differently. To their credit, they need to keep the lights on (although not in Google’s case), while marketers trade in relatively obscure commodities, such as consumer trust.
But there’s no time to wallow in self-pity. Fewer resources mean marketers have to roll up their sleeves and do more with less. They have to work smarter. They have to wring value out of every dollar, as they battle to win and retain skittish customers.
[Related: Join KPMG and CMO Council on our four-part webinar series, Marketing Mandate 2020: Pivot Your Plans, Optimize Your Spend.]
It’s going to be a hard journey, one that will make the Great Recession more than a decade earlier seem like a slog rather than a test for survival. The subprime mortgage crisis was painful and a shock to the system, but a global pandemic is the stuff of apocalyptic movies. No one knows what awaits us next week, let alone the rest of this year and beyond.
In a March CMO Council survey, half of global marketing leaders said they were bracing for budget cuts. A Marketing Week and Econsultancy study found similar results: 50 percent of UK brand marketers will be making budget cuts so that they can “live to fight another day,” while 29 percent plan to “stay the course” and maintain budgets.
After a brutal April, these percentages have likely taken a turn for the worse.
Contracting budgets put a premium on due diligence. In other words, when marketing budgets come under fire, marketers can keep their cool by spending more wisely and showing how their dollars lead to business outcomes. This mindset applies across a marketer’s entire portfolio, from martech and suppliers to content and campaigns.
In the case of martech, marketers overspent (without much oversight from the CIO) and underutilized software tools. To the chagrin of the CMO, the martech stack is often called the “frankenstack.” Yet in the days and months ahead, marketers can change this narrative by maximizing utilization of existing technologies.
Content marketing is another black mark for CMOs. Marketing departments can spend up to a third of their budget churning out mountains of content. Much of the content falls flat, making it a waste of budget. Now marketers will have to re-think content creation, distribution, measuring impact and re-use of existing content.
[Related: Check out the CMO Council report, Making Content Grow Into Customer Flow.]
CMOs will have to drive these and other efficiencies as marketing budgets shrink. How bad will it get? The CMO Council has begun tracking reports on changes to the budget. Here are a few:
Tom Kaneshige is the Chief Content Officer at the CMO Council. He creates all forms of digital thought leadership content that helps growth and revenue officers, line of business leaders, and chief marketers succeed in their rapidly evolving roles. You can reach him at firstname.lastname@example.org.
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