Is new thinking in short supply? CMOs base Covid-19 response on previous crises
Predicated by Covid-19, most major global markets are facing a downturn and consumer confidence has hit an all-time low. But even as chief marketers attempt to help their businesses survive the pandemic, a new report warns that old thinking may only hold brands back.
A Dentsu paper has found CMOs are basing their Covid-19 strategies on previous recessions.
Dentsu’s annual report has analysed how marketers are navigating a new kind of recovery. Incorporating the views of 1,350 CMOs covering 12 markets between May and June 2020, it found that nine out of 10 are reverting to past strategies to see them through – and that only one in 10 conceded Covid-19 might pose an existential threat to their organisation.
New thinking is in short supply
- The report found only one in 10 CMOs are looking at entirely new strategies. With businesses managing a novel kind of crisis, 49% are basing their recovery strategies on approaches taken in previous recessions.
-
While the 2008 financial crisis (and subsequent global recession) provides a reference point, the report warns that brands risk using ’traditional’ recovery strategies.
-
The report warns that basing strategies on previous recessions is a serious oversight, due to the novel nature of the pandemic and its impact on freedom of movement.
- The report praises brands that have created entirely new strategies, pointing to the leisure sector – which had to rapidly develop response tactics when faced with unparalleled shutdowns.
Budgets are tight
- Despite the general rule that brands should not ’go dark’ during a recession, the report found that budgets have been slashed, with nearly two-thirds (62%) of CMOs expecting their budgets to decline or stay static over the next 12 months.
-
More than half of larger businesses (over 1,000 employees) are planning on increasing their marketing spend, compared to just 19% of SMEs.
-
If marketing budgets are under threat, CMOs will find it hard to balance business and brand interests. The report suggests CMOs will struggle to spend their way back to growth, considering the significant impact on budgets.
-
Smaller businesses will suffer more because larger companies are better able to weather the storm and deal with inevitable revenue reductions.
Swings and roundabouts
-
One in 10 report Covid-19 as an existential threat, with six out of 10 CMOs claim their businesses have been significantly affected by the pandemic.
-
With less than a quarter of CMOs claiming the pandemic will only cause minimal disruption to their business, one in ten (generally larger businesses) report the crisis has, in fact, helped their business.
-
As CMOs get on the road to recovery, they are starting at different places. With larger businesses performing generally better, the report hints at devastating consequences for smaller businesses.