To Spend or Not to Spend?

The economy hasn’t quite recovered yet, so should you put your marketing spend on hold a while longer or start investing in your brand again?

Recently Marketing Week reported that Deutsche Bank had conducted an analysis into the importance of advertising and promotions. We’re told that one of the bank’s analysts looked at performance and marketing spend of 30 multinationals on their food and drinks brands over a 15 year period and concluded that “…sustaining marketing spend is critical to the health of brands in this sector…” and “increasing spend delivers sales growth 30% faster…” than those who don’t.

Marketing Week bills the research note as a “marketer’s dream” thus implying that clients should dig deep and get on with their campaigns. But is this really all it seems?

The big brands may need to maintain their position in the public’s shopping trolley, but thanks to having already gained their prime position, they can better afford to invest in marketing activities anyway. Furthermore, they may also have the most to lose if they allow competitors to gain ground in an already crowded market of food and drink products.

But in any case, their marketing spend over the 15 years is unlikely to have been consistent year on year – on the exact same products and the exact same activities. Like companies of all sizes, they may look at opportunities to maximise their budgets and make their spend go further – e.g. cutting expenditure on some brands and investing it on others, switching focus from one set of marketing activities to another, and replacing their expensive global ad agencies with boutique ones which will work harder!

See: http://www.marketingweek.co.uk/a-new-weapon-in-the-battle-for-recognition/3008880.article and http://www.marketingweek.co.uk/news/deutsche-study-urges-investors-to-learn-about-marketing/3008853.article

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