How to survive in 2023

Marketers the world over may well be worried, because next year is going to be torrid. In an extensive survey that includes South Africa, the World Advertising Research Center (Warc) reports that 95% of respondents say they will be affected by inflation and a probable recession.

Hilton Rose, group marketing head at property company Broll, sums it up well. “Ukraine, climate change, food supply, energy flow and recession. In South Africa, we also must deal with load-shedding and water-supply issues.”

Warc’s survey brings together insights from about 2,000 marketers and one-to-one interviews with senior marketing executives.

Linda Lee, chief marketing officer of Campbell Soup/Meats & Beverages, says: “The recession is real and that’s led to a new effort on our end around value, marketing, and messaging. At a time like this, it’s important to not cut back on marketing but lean into how we can help our consumers.”

She says strong brands that focus more on brand advertising than price promotions can weather price increases better. She also believes that the tone of messaging is important in building connections with customers. “Humour, an underutilised technique, if used well, can be a competitive advantage.” 

Andrew Weinberg, CEO of Cape Town-based payment solutions company Crossgate Holdings, tells the FM: “As the economic crisis deepens, with no real end in sight, consumers are going to consistently buy down, meaning that instant and impactful savings at point of sale will overtake brand affinity.”

Broll’s Rose believes marketers should adopt a two-speed approach. “Consumers are counting their rands, but don’t react to present challenges at the cost of your long-term goal. You may be tempted to go for price promotions, but never forget your brand value.”

He also advises marketers to focus more on integrity. “It builds trust. This is particularly true when it comes to social purpose. Activities like greenwashing just won’t cut it.”

Rose believes marketers should think beyond the Generation Z or Zoomer demographic (those born in the late 1990s). “We see a lot of marketing targeting this generation, and for obvious reasons it’s warranted. They are the market of the future. They are vocal, and a powerful reputation army. But don’t forget the now, 2023. We must negotiate this year first, before there’s any tomorrow, so speak to all your customers, not only the ones you aim to have, but the ones you have and want to keep. Take nobody for granted.”

Just over 60% of marketers agree that the Big Tech companies are being forced to shift strategies.  Growth, notes the survey, is slowing in Big Tech’s core sectors, including digital advertising and e-commerce, and Alphabet and Meta’s “duopoly” is being challenged. For the first time in six years there is a negative investment sentiment towards Facebook.

Warc says the rise of TikTok and Amazon, and relative newcomers like Netflix joining the advertising space, may enable marketers to re-evaluate and recalibrate media plans to suit their brands’ needs.

Conny Braams, chief digital and commercial officer at Unilever, says: “Behind the scenes, we’re working to ensure we play a part in making this evolving arena representative, inclusive and safe for everyone who uses it. Robust governance around issues such as data privacy, safety, equity, diversity and inclusion, sustainability and ethics need to be established, and we’re using our scale and global profile to help set future-fit foundations for our business and beyond.”

Weinberg says: “One of the major drivers of Big Tech company profitability is cost of acquisition of new customers and retention. The increased costs driven by essential services like fuel, electricity, food prices and many more, will lead to a focus on customer retention and maximising average revenue per user rather than new client conversion. This means marketers need to refocus budget and strategy on customer engagement and less on market share.

Accurate customer targeting will be critical, he says. “Conventional brand affinity marketing will not change consumer behaviour, and marketers need to target the consumers they want directly. Above-the-line marketing is diminishing, with direct campaigns in stores having a far-reaching effect on buying behaviour. The exponential increase in loyalty programme affinity and adoption has demonstrated that consumers are more aware at the point of sale than ever before.”