2022 has been much more challenging than initially predicted. In January, Ashley Friedlein predicted that the year – which he described as the ‘Great Reset’ – would be a chance for marketers to “recognise what has changed for good and what we need therefore to get used to and get good at” following two years of Covid-related upheaval.
However, marketers are once again facing uncertainty, with inflation and economic pressures hitting consumer confidence.
So, how do marketers feel about what’s to come, and how is the current climate impacting budget and strategy? This is one topic covered in Econsultancy’s Future of Marketing report, based on a survey of 716 client, vendor, and agency-side marketers between 25th March and 19th April 2022. Here are some key takeaways.
Marketers’ optimism is reflected in budgets as 60% expect to increase theirs
Despite challenging conditions, marketers are surprisingly optimistic, mainly due to the belief that marketing can play a vital role in helping businesses withstand and even thrive during economic uncertainty. Erich Joachimsthaler, Founder and CEO of Vivaldi Group, who was interviewed for the report, said that: “…the prime time for marketing is times like right now, because you manage the most critical relationship that a company has, its relationship with the customer.”
Indeed, this optimism is being reflected in marketing budgets, with 60% of survey respondents saying that they expect that their marketing budgets to increase in next two years – only a slight decrease from the 63% who said the same in last year’s survey.
Figure 1: How do you expect marketing budgets to change over the next two years?
The latest IPA Bellwether Report also reflects this optimism, for the meantime at least, finding that 24.2% of respondent companies raised their total marketing expenditure during the second quarter of 2022, while just 13.4% registered budget cuts.
Discussing the Bellwether Report on its release, Paul Bainsfair, Director General of IPA, suggested that businesses which maintain budgets rather than cut back are likely to win in the long-term.
“All the IPA’s analysis on who does best in a downturn, shows that the companies that recover fastest are the ones that either maintain or increase their marketing spend during difficult economic times. Equally, cutting ad budgets – relative to competitors’ spend – in a recession undermines companies’ ability to grow future market share and profits,” he said.
In terms of where any increased budget will be spent, Econsultancy’s ‘Future of Marketing’ survey found that marketers expect the biggest increases in budget to be in data and insight capability, strategic initiatives (e.g., digital transformation), and technology and infrastructure spending.
Putting data to work is the new priority
Data is not a new concern, of course. However, there has been a subtle shift this year, with marketers recognising the need to not only understand data, but to put it to work. As Kate Cox, CMO of BrightBid.ai told Econsultancy: “We’ve been talking about data for decades now, but actually pulling data sets together and integrating them to create something really usable is still new for most companies.”
Indeed, the biggest priority for marketers in the next two years is a move to more data and insight-driven marketing, cited by 37% of respondents.
Figure 2: Which areas are most important over the next two years? (Respondents were asked to select up to three)
Majority of marketers agree on importance of empathy and understanding consumer needs
Second to data as a priority is the improvement of customer experience and customer journey management, cited by 25% of respondents.
These top two priorities go hand-in-hand, with a great customer experience relying on a marketers’ insight and command of data. Again, however, respondents to this year’s survey highlighted the need to delve deeper than surface-level insight, with 59% agreeing that having the ability to navigate changing consumer behaviours and CX expectations will be very significant to an organisation’s success.
Similarly, to meet rising CX expectations, 60% of respondents said that empathy for the customer and a deep understanding of their needs will be critically important. Empathy is particularly vital during challenging times, with brands that offer real and tangible value to consumers (as was seen during the pandemic) more likely to generate consumer favour, and overall success.
Figure 3: How important will the following be in meeting customer experience (CX) expectations over the next two years?
Genesy’s ‘Connected Customer Experience’ report, which explored consumer expectations during the pandemic, surveying over 11,000 global consumers between December 2020 and April 2021, found that empathy is now favoured by consumers over any other factor within CX. The report states that almost two-thirds of respondents prefer an empathetic customer service experience over a speedy resolution or even a personalised experience, while characteristics of empathy were found to be the most valued by consumers in all regions.