IPA EffWorks Global 2022 - Brands that advertise during a downturn come out stronger

We recently attended EffWorks Global 2022, the IPA’s festival of marketing effectiveness. If you missed it, we are here for you!

With speakers from Aviva, Brand Finance, eBay, TikTok, Cadbury, Specsavers and Snap there were lots of views discussing investing in brand building during challenging times, full-funnel marketing, forecasting in an age of uncertainty, owned channels and increasing share of voice during economic turmoil…and lots more. We’ve cherry-picked some highlights, particularly those discussing the current advertising climate post-pandemic and as we enter further economic uncertainty.

Why does Brand Advertising Matter in 2022 and Beyond?

Brand advertising has always been crucial to delivering long-term customer recall and trust. It helps companies reach wider audiences, make their products or services recognisable and memorable, and helps build customer relationships. Data from  IPA research found that businesses which recorded a big increase in brand advertising also saw significant growth in their business metrics. What's more, the more marketing activity strengthened brand recall, the more the performance of the business improved over an extended period.

According to data from Brand Finance, companies with a strong brand continue to outperform their market. Analysis from index fund benchmarks demonstrate how the strongest brands deliver much higher shareholder returns. In the UK, the top 50 brands delivered returns 30% higher in 2021 and in 2022 even with the current climate; the cumulative return is 10% higher than the FTSE 100. The data underlines the importance of investing in brand-building activity now, more than ever.

Is Cutting Advertising Investment a good idea in tough times?

The IPA recently ran a half-page ad in the Financial Times, which read; “Come back in a year and tell us if cutting your budget was a good idea”. While predicting where the economy will be in 12 months’ time is near enough impossible, evidence of how budgetary decisions impacted companies’ performance from several previous recessions is readily available. This evidence shows us that companies that increased their marketing activity during tough markets created a competitive advantage that helped them report higher average profits and better market share growth once the markets recovered.

Now it might seem wise for businesses, facing today's surging costs and weakening consumer demand, to cut their marketing budgets and reinvest elsewhere, but companies that do this are at risk of experiencing slower future growth and losing out to competitors that have invested in a long-term, brand-building and acquisition advertising strategy. As it is likely that competitors will cut their budgets this gives companies with the foresight to invest the opportunity to increase their share of voice in the market if they maintain or increase their current investment in marketing.

Why is it now crucial to focus on First-Party Data?

With the decline of third-party data, marketers need new ways to capture customer information. This poses a challenge for many organisations that have relied on cookies to advertise and track user behaviour. This means that marketers will now need to collect and use first-party data as effectively as possible to get ahead of their competitors. The decline of third-party data may make things harder for marketers, especially for competitive analysis. But when used correctly, first-party data can be a goldmine for your business with targeting the right people getting easier as first-party data drives better personalisation. Sources of first-party data include:

• Website or app behaviour 
• Email and newsletter subscribers 
• Lead generation campaigns 
• Surveys 
• Owned channels 
• Customer feedback

As first-party data is owned by you, and you alone, it offers increases in accuracy, reliability, and relevancy, gives you control over data and builds stronger marketing campaigns.

In summary, the data tells us that investing in marketing during a downturn leads to strong growth when the better times return and that the future is first party data insights to drive marketing success. Are you ready to weather 2023?

Hopefully, you found some of our key insights useful, all reports which were focused on during the event can be found here. If you’d like to discuss how you can gather more of your first party data insights and put them to good use in your marketing, please contact us!