Surviving the Perfect Marketing Storm of 2023

Over the past two years, the relationship between marketing spend and revenue generation has been rewritten. Like relationships, relationships between brands and consumers are put to the test during times of stress. Image: Shutterstock

T.There are rumors in some business and marketing circles that 2023 will be the first normal year after the turmoil of the past few years. In my opinion nothing is far from the truth. A perfect storm is brewing and few marketing organizations are ready to come out stronger on the other side.

So here are some key questions CMOs should ask themselves as they assess their marketing readiness for 2023.

1. Are you aware of the new relationship between marketing inputs and brand sales?

Over the past two years, the relationship between marketing spend and revenue generation has been rewritten. Like relationships, relationships between brands and consumers are tested during times of stress. And whatever the outcome, there tend to be some surprises. Here are some observations:

Big Brands Spend Too Much:

Many established brands have come out of the pandemic as they have found themselves spending more than necessary levels in the past. In other words, reducing pandemic spending had no impact on sales. Data-driven marketing, marketing-mix models, media inflation, media fragmentation, and competitive activity have all been good reasons for historically high levels of spending. There’s also the organizational truth that no one has ever seen his ambitious CMO ask for a budget cut. In fact, large brands have momentum for long periods of low/no spending. What is your brand new level?

An unknown brand received overnight acceptance:

Brand building has never been more modular than it is today. We find proposals, outsource products, outsource manufacturing, outsource distribution and logistics, and do in-house packaging design and marketing. The past two years have accelerated this model, leveling the playing field for new players. The growth of powerful microbrands in the watch industry is a good example of this modular business model at work. Household and consumer goods just got easier. What can newcomers learn for their brands if they can work with little money?

2. What is digital marketing really doing for my business?

Questioning the value of digital marketing is heresy for many marketing organizations. Only those with a strong heart can objectively question each element of the marketing mix and ask the tough questions.

Marketing means more than just digital marketing.

Battalions of young marketers and young CMOs of established brands at heart are embracing digital without question. Yes, digital works wonders for mid- and lower-funnel challenges (education and sales). That’s why new entrants can build their business so quickly. But massive mass reach is still important for big brands selling to hundreds of millions of consumers each month. A digital-only approach to brand building at scale remains an open challenge. It should come as no surprise that some of the largest spending on mass reach advertising vehicles (Super Bowl, IPL, etc.) comes from new digital/tech brands looking to rapidly increase awareness at scale.

Also read: How has marketing changed in the last half century?

digital marketing sugar vs protein

At the bottom of your funnel, performance-driven digital marketing works as long as you keep spending. Just like sugar, you need to quit and give it another go. What is the protein part of your digital marketing plan that can drive and maintain not only revenue but also attention? Content-driven digital marketing and Commerce is rapidly emerging as a full-funnel digital marketing option.

3. Do all executives understand marketing in the same way?

The dramatic consumer fragmentation of the past few years has brought with it enormous market development challenges as well. A fragmented consumer base has greater access and choice when it comes to brands. It’s exponentially harder for marketers to reach.

CMOs have equally important internal challenges

Dealing with the fragmented consumer outside world and building a business is challenging enough. His CMO today faces the added complexity of working with more agency partners and bringing together relevant insiders, each with their own marketing tactics, on the same page. What are you doing to make sure everyone understands the same marketing jargon associated with today’s fragmented consumer?

Guatam Kiyawat is Professor of Management Practice at ESSEC Asia Pacific.