Advertising executives looking toward an uncertain future continue to focus on connecting with consumers, according to a report in the Wall Street Journal. It's a perspective that goes against the knee-jerk reaction of cutting ad and marketing budgets during economic slowdowns.
Even in the face of bleak forecasts for 2023, WPP PLC and other large advertising companies continue to update theirs as clients continued to spend in areas such as communications, e-commerce, data, technology and public relations. “We’re not expecting a slowdown in the fourth quarter,” WPP Chief Executive Mark Read says, “and actually, a couple of clients are looking to increase their budgets.”
In some cases, high-end brands such as luxury cars and travel packages have proven to be inflation-proof. Brand consultant Simon Sproule notes that even as most luxury brands may not be able to produce goods fast enough to meet current demand, suggesting a stop on advertising, smart marketers are spending more to build long-term equity. Due to rising demand for its high-end hotels, Marriott International Inc. increased its marketing budgets. “As wealth rises, people tend to accumulate higher-end experiences as they go,” Marriott Senior VP of Luxury Brands Chris Gabaldon says.
So where does this leave advertisers of food, drinks, personal care and household goods, all of which are at risk of consumer cutbacks, as higher prices could prompt buyers to look for cheaper options? Walmart's positioning has been keeping its prices low as a way to help consumers during tough times. “We knew that people are changing their behavior,” Walmart Chief Marketing Officer William White says, “so it’s important for us to be clear in the role that we can play.”
Other advice offered by advertising and financial execs: keep the focus on return on investment and business goals, maintain brand identity, and be innovative.
“In the next few months, if you have not already been asked, you’re going to be asked to cut your budgets, you’re going to be asked to find ways to save money,” Association of National Advertisers CEO Bob Liodice says. “This is not the time to do that.”