Why should product manufacturers protect marketing and innovation investment in the current climate?
In the latest in our eStoreAcademy series of free webinars on e-commerce best practice for brands, the presenters explore reasons for investing in marketing and innovation at a time when business survival is in question.
Jennifer Shaw-Sweet, from The B2B Institute at LinkedIn focuses on marketing and advertising in her contribution to the session, which she subtitles, “All Weather Marketing, Making Good Decisions in Bad Times”.
Despite the obvious challenges, facing brands and product manufacturers around the world in 2020, Jennifer insists there are reasons to be optimistic. While there may be pressure to cut costs associated with marketing and advertising, she cautions against it. There has never been a more important time to invest, not only to survive, but to succeed in these tough times and beyond. She points to past crises from the Great Depression to the more recent global financial crisis, where organizations willing and able to ‘be brave’ actually thrived despite general decline.
Kellogg is a great example of how investing in marketing during a downturn pays off in the long term. Nearly a century ago, as the ‘roaring twenties’ came to a crashing end, Kellogg was nothing like the packaged cereal brand leader we know today. At the time, the nascent cereal category was led by Post. When the depression hit, Post reined in expenses and cut back on advertising, while the upstart Kellogg doubled down, investing heavily in radio advertising to push its new product Rice Krispies.
Its investment paid off. By the time the depression ended Kellogg had become the cereal industry’s dominant player, and its profits were soaring. According to Jennifer, the data shows us again and again that organizations willing to invest during recessionary times reap the rewards in terms of faster growth when economies finally recover.
Contrary to popular belief, she says that many brands do not need to generate new creatives to align with the ‘new normal’, as audiences are likely to resonate better with familiar, trusted content. The same goes for the balance between brand building and lead generation/activation. While many business leaders tend to concentrate budgets on activation in downturns, data shows that organizations perform better in the long run when they continue to invest in brand advertising, and protecting their share of voice.
Innovation advisor Monika Stezewska-Kruk, who has worked with the likes of P&G, Nielsen and PepsiCo, echoes many of Jennifer’s points. She talks of the need to maintain investment in innovation, notwithstanding the financial pressures companies face. While many CEOs feel now is a time for retaining cash, avoiding distractions and concentrating on traditional KPIs, Monika argues that investment in innovation – like investment in marketing – will pay dividends, supporting business survival and boosting future expansion.
In any case, innovation doesn’t necessarily require massive financial investment. "Yes you can spend money, but there are many ways that small changes can make a difference," she says. Start by leveraging employees who are often first to identify opportunities for innovation, ensure your organization has a culture for nurturing innovation and have procedures in place to support the process, she explains.
Monika also advocates following Design Thinking processes for nurturing innovation, and she outlines the approach in her presentation.
Thanks to our guest contributors Jennifer Shaw-Sweet and innovation advisor Monika Stezewska-Kruk, and our moderator, Marc Baker, Tyde.