More than 60% of global companies remain committed to investing in their brand despite the economic impact of the COVID-19 pandemic, according to a new IPA/Financial Times study, the Board-Brand Rift 2020. Capturing the opinions of nearly 600 global C-suite and marketing decision makers, the research examines how the worldwide pandemic has changed brand perception and management inside businesses.
Whilst commitment to brand building is seen across the board, some sectors were more likely to be maintaining spend through the current downturn. IT and technical services sectors are the most likely to maintain their marketing spend (41%), followed by manufacturing / engineering / industrial (34%) and professional services (34%), with marketers saying they have learnt the importance of brand building through previous downturns.
The study also points to significant shifts in business priorities, decision making horizons and customer behaviour, as a result of COVID-19:
Businesses are in defensive mode
- 68% of respondents say business resilience has become more important as a result of COVID-19. It now ranks as the top business priority; in 2019 it was 4th out of 8.
- The assurance of future levels of cash flow has also become a priority, with 59% of respondents saying it is more important as a result of COVID-19.
- Reducing organisational risk now ranks 4th in our list of business priorities, up from 7th in 2019.
- Profit growth dropped from the top of the list to 6th place, with 28% fewer respondents rating it a priority.
Decision-making horizons are shorter-term as a result of shifting priorities
- 40% say commercial decision making is more short term and 36% say marketing decisions are more short term as a result of the coronavirus pandemic.
- Most businesses remain agile on spend with 53% ‘continually evaluating their options and will release funds when they feel the time is right’.
- Despite this, 79% of respondents either strongly agree or agree that thinking in the long term about marketing investment is key to sustainable growth, vs just 3% that either strongly disagree or disagree.
Marketers are removed from financial decision-making
- The data points to large differences between marketers and non-marketers when it comes to involvement in investment plans, suggesting marketers do not have a seat at the table when it comes to corporate financial decision-making.
Brand strength more important as product discovery moves online
- Over half of respondents state that, as a result of COVID-19, their customers increasingly discover their products online (51%) and buy them online (45%).
- Brand strength is becoming more important as product discovery moves online. 71% of respondents say it is key to online purchase decisions vs 61% who see it as a priority for offline sales.
Companies appreciate value of emotional messaging to acquire new customers
- Exactly half (50%) of respondents agree or strongly agree that the best way to acquire new customers is through emotional messaging, making potential customers feel differently about your brand, while only 16% disagree/strongly disagree.
Says David Buttle, global marketing director, commercial, Financial Times: “At the FT we show commercial partners year after year the benefits of long-term brand investment. With our recent ‘Crises Make Reputations’ campaign we put our money where our mouth is, and it is clear from this year’s Board-Brand Rift that those brand perceptions are quickly moving online, even for more traditional ‘offline’ businesses.”
It is encouraging to see that an overwhelming majority of decision makers see marketing investment as key to long-term sustainable growth, even in a hugely challenging business environment, an uncertain macroeconomic outlook and rapidly changing customer habits.
Says Janet Hull OBE, Founder of EffWorks Global and Director of Marketing Strategy, IPA: “Despite the tough environment, the overall takeout from these findings can be seen as positive. To recover, we need upbeat sentiment which we see in terms of company attitudes, together with investment to underpin this, which we see in terms of a return to marketing expenditure in some significant sectors. What is also interesting from these findings is the growing importance of online activity, alongside companies placing value on emotional messaging to acquire new customers. This chimes well with additional research from Orlando Wood coming out tomorrow at EffWorks 2020, which reveals the trick to building your brand online. Let’s hope company boards and marketers play close attention in order to build their business’s long-term resilience and success.”