I think that I speak for all B2B marketers (both agency and clients alike) when I say that this year has been one of the most challenging years on record. Certainly in my time in the business, which scarily is rapidly approaching 18 years, I’ve not experienced operating conditions like this before.
I distinctly remember saying when I first started writing this blog that I would avoid talking about the recession as I felt that as much as anything business confidence was critical in perpetuating this. The research that we carried out amongst B2B practitioners showed that despite the fact that much of the hysteria that was around this time last year, that practioners in general felt cautiously upbeat about the prospects for 2009.
What transpired will probably be remembered as our anus horriblus, and although we are by no means the only industry to have been hit hard, marketing has traditionally took the brunt of any downturn and this one was no different. Whilst this subject is normally taboo, I know that many businesses have been forced to examine their cost base and to make hard operational decisions. Whilst painful at the time this period of introspection will have a beneficial long term effect, within marcomms. I believe it will make us all appreciate the good times better when they return.
We have had oversupply issues in the industry for many years now and in that sense driving some of this out of the industry will be a healthy process. I know that many of our clients have found trading conditions as tough but this has been almost uniform across all of the geographies, disciplines and verticals that we operate in.
On the upside, it seems to be the general consensus that we have ‘seen the worst of it’ and we are starting to see the green shoots of recovery in many of our markets. All of the leading indicators are encouraging: all leading European economies officially out of recession (except the UK and Spain); business and consumer confidence returning; the housing market rallying; the FTSE and NASDAQ on the up; and a strengthening pound. Recent industry reports surveying agency outlook for 2010 shows a quietly cautious optimism about the year ahead, however, I don’t think it’s time to exhale, and any recovery will be slow and shallow.
As we inevitably start the post mortem of the year, marketers are starting to consider what a ‘post recessionary’ world will look like. It’s fair to say that this year marketers have been forced to innovate and to change behaviours. Certain trends have been accelerated, such as the continued migration of online activity, and it will be interesting to see how much of this is longer term structural change.
Following on from some of our recent thought leadership work, we have been carrying out some detailed research within the B2B space to investigate this. Our Brand or Demand initiative seeks to examine the premise that recessionary pressures cause marketers to disinvest their brands in favour of short term demand generation, or whether this is indeed a false dichotomy. I guess this is a contemporary expression of the classic ‘RAT’ trap with Research Advertising and Training budgets being hit in any downturn. As many businesses have been in survival mode sales have been critical to recovery, and any expenditure which is seen as discretionary is deemed to be vulgar against a backdrop of operational cost control.
We are bringing our findings together at a summit in Manchester on the 23rd February where we will be debating this with the CMOs of some of the biggest B2B brands: HSS, BUPA, The CarbonNeutral Company and Pearson Vue to name but a few. For more information on this event check out the website at http://gyrohsrbrandordemand.eventbrite.com
I personally believe that while any recovery will be gradual that there is a pent up demand waiting to be released. There is a theory in marketing called the competitive saw which sees any downturn in marketing expenditure reflected in a downturn in demand which must be addressed by a corresponding uplift in activity. Some of the trends that we have seen emerge won’t reverse, recent figures from the MCCA show that it’s unlikely that we will see a return to anything like 2008 expenditure levels on print and display. Stakeholder comms and digital have been big winners from this year and that’s one of the reasons why GyroHSR has significantly outperformed the market this year.
In any case the environment in which we operate in is unlikely to return to how it was in pre-recessionary times and the future success of agencies and clients inevitably relies on their ability to adapt to the constantly changing challenges that businesses face on a day-to-day basis. In that sense nothing has really changed that much at all.
By Danny Turnbull, General Manager of Manchester marketing agency, gyro