As CMOs are plotting the recovery of their marketing plans from the rubble of the Covid-19 pandemic, they are facing fresh challenges, a new survey from Dentsu reveals.
Even as they consider emerging from enforced hibernation, these executives are racing to comprehend changing consumer behaviours while they also contend with whether to increase, maintain or shrink their marketing expenses.
CMOs recognise that even if they are able to understand consumers better, aligning their brands around this shifting sentiment is a huge challenge (cited by 39% of CMOs).
According to the survey, Into The Unknown: CMO Survey 2020, despite the advice that brands should not "go dark" during times of recession, nearly two-thirds (62%) of CMOs recounted that their marketing budgets were forecast to decline or remain constant over the coming 12 months. As a reference point, in Dentsu's 2019 survey 41% of CMOs forecast this level of decline in their budgets.
Among the markets surveyed, Australia was one of the most pessimistic about marketing budgets, with 36% predicting a decline. Japan aniticipated that budgets would stay flat (29% versus the global average of 22%). China, by contrast, was among the most optimistic markets, with 56% of respondents there predicting budget increases in the coming year.
Nearly half of the CMOs surveyed conceded they were basing their response to the coronavirus crisis on strategies that were pursued during previous recessions. Globally, just one in 10 CMOs was looking at entirely new strategies. Nearly half (46%) in India were using "completely" similar strategies to those pursued in previous recessions, compared with the 17% global average. On the other hand, only 6% in China were doing so.
Marketing leaders ahead of the curve seem to be acting differently from the laggards, according to Dentsu's report on the survey. According to findings, "frontier" CMOs will collaborate more heavily with other teams, increase their investment in product development, develop direct-to-sales models and rationalise their brand portfolio in these challenging times.
According to the report, these frontier CMOs have displayed five key traits:
- Hyper-empathy: The ability to understand existing and new consumers more deeply and update that knowledge in real-time.
- Hyper-agility: The ability to act like a start-up and turn consumer insight into the rapid development of new, relevant messaging, products and services.
- Hyper-consolidation: The ability to quickly rationalise portfolios and prioritise larger, more resilient brands that are better able to survive periods of economic fragility.
- Hyper-transparency: The ability to ensure that all elements of how brands operate stand up to extreme external scrutiny.
As CMOs forge ahead with their plans, an area of concern for them is the seeming inability of agencies to keep up. According to the research, there were three main areas of improvement: helping CMOs manage their limited budgets through greater efficiencies and cost reduction; driving long-term growth; and proactively bringing new insights to the table.
“Exceptional times call for exceptional thinking," Wendy Clark, global CEO of Dentsu, said in the report. "The Covid-19 global health crisis has yielded an incisive economic downturn that creates an unknown and largely unpredictable environment for CMOs to navigate. And our survey reveals there is a risk that CMOs are still using existing approaches to manage a challenge that is without precedent.”