We recently put this call out to in-house marketers, asking direct questions about marketing budgets in response to the two UK Covid-19 lockdowns, across everything from outdoor advertising to digital PR.
Of course, it’s beneficial to us an agency, but it’s about more than that – we wanted to get a sense of how marketers are feeling right now, across both disciplines and sectors.
We’ve had more than 100 individual responses to the survey, from startups founded since the first lockdown all the way through to marketers at big name brands like Ben & Jerrys, Paddy Power and Acast – and we’re going to share them with you.
Has your agency budget been affected since the beginning of the first lockdown?
Personally speaking, we noticed an immediate client response to the first lockdown, with a number of clients asking to pause spend in certain places until they were able to assess the impact on them. For some clients, especially those in the leisure, hospitality and travel sectors, the immediate impact was more obvious. Many have since returned, some with a different focus.
Looking at the data from the survey, more than a third of marketers said they’ve had to reduce budgets with agencies since the end of March lockdown, and a similar number say they’ve gone to a project-by-project approach, versus retaining suppliers.
Just shy of a fifth said they had halted agency spend entirely.
Almost a third said they had not changed how much they spend with agency suppliers.
Spend – up or down over the next three quarter?
As you can see – more than a third said their budgets would likely increase.
The majority said they believed their budget would stay the same. Combined, those two points show the worst might be behind us.
Fewer than one in five respondents said they would likely spend less on marketing in the next three months.
I personally would have imagined that number to be much higher, but with Christmas coming up and any big budget changes likely made since the first lockdown, it’s great to see.
If budget is increasing, what are brands going to be spending more on?
This was a key area for us to look at – mapping our agency resources and capabilities against potential areas of growth. We imagined this might be an area of particular interest to other agency owners too, but also – brands can see where competitors are likely to be challenging most.
Paid social and pay-per-click advertising, already competitive tactics, came out top in terms of what brands are going to be pumping more money into over the next quarter.
There, unsurprisingly, appears to be a preference for activity that has a more easily provable impact on the bottom line.
If budget is decreasing, what are brands going to be spending less on?
Media relations and content marketing look to be on the chopping block for more than two-thirds of the brands looking to reduce marketing spend, with digital PR/linkbuilding spend a concern for almost half.
Just as PPC, paid social and affiliate marketing feature highly on the list of the tactics brands are likely to be leaning into if increasing their budgets, they are among the least likely tactics to be dispensed with over the next quarter.
This graph (along with the one looking at budget increases) makes for worrying short-to-medium term reading for PR agencies that concentrate predominantly on media relations. I can speak for Radioactive when I say we’re seeing much less in the way of new briefs for product launches, brand awareness campaigns and the like – and again, understandably so. Those briefs have been on the wane for the last couple of years, especially as solid media relations foundations combined with creative digital PR and linkbuilding serves a dual purpose.
The majority of respondents used agency suppliers to support their marketing efforts.
Why use an agency?
We asked respondents why they used agency partners.
- The main reason, chosen by three quarters (76%) of marketers that used agency support, is the access to specialisms and/or expertise they didn’t otherwise have internally.
- The least selected reason – creativity – was still chosen by 58% of in-house marketers.
- 70% said they used agency partners as a ‘additional resource’, and 55% said they used agencies for access to their relationships.
Quotes from brand marketers
This from the COO at a leading travel group is an especially honest and business-minded appraisal of a difficult situation:
The biggest pain of the lockdown is (separate to lost revenues) the uncertainty. Whilst we expect revenues to increase massively again when we’re out of lockdown, we don’t know when that will be and we don’t know whether the increase will make up for the loss. Add to the mix the fact that we need to manage cashflow in that period and everything becomes a huge exercise in plate spinning.
We should be fine. But we are the lucky ones. And know that, eventually, if this keeps happening, there’ll be no one that escapes it.
Great as long as we have funding (lockdown seems to have affected fundraising more than business)
This quote from the head of communications and external affairs at an engineering company is an example of the frustration many are feeling:
Budget constraints aren’t worsening specifically as a result of Lockdown 2, but the continued limitations that started with the pandemic are making the job extremely difficult. We’re simply not able to capitalise on the available opportunities.
Reduced budgets since the first lockdown, a lurch towards one-off projects versus longer term retained relationships and a further shift towards measurable marketing are some of the key takeaways.
Brands want to market their way through where possible, and they’re understandably cautious. But it’s not all doom and gloom.
Three quarters of in-house marketers think their budgets will either stay the same or increase in the next three months. Only 17.4% think they will shrink from where they are at right now. That’s promising.
Overall – there are opportunities, and if indeed the worst is behind us all – at least there’s a path opening ahead.
*The £100 prize draw winner (for taking part in the survey) will be announced publicly, pending their permission, on social media in the coming days