Survey finds marketing grew in importance due to COVID-19
- 23 June, 2020 07:36
Marketing grew in importance during the COVID-19 pandemic, according to the latest Covid-19 and the State of Marketing CMO survey.
The US-based report focuses on understanding the impact of the pandemic on marketing in companies and found 62 per cent of marketers reporting the marketing function has increased in importance during the pandemic.
Building brand and customer retention through digital, mobile and social strategies are key to that heightened role. However, while the pandemic has influenced the importance of the marketing function itself, it has not influenced the willingness of brands to take a political stance, with 81 per cent of marketers reporting it is inappropriate for their brand to take a stance on politically-charged issues - a percentage virtually unchanged over time.
The survey also found marketers are more optimistic about their own companies than they are about the overall economy. But this figure still dropped to near Great Recession levels, with marketers reporting 68.8 out of 100 in this survey, compared with 64.2 in February 2009.
Marketers’ priorities have also shifted as they try to drive growth through the pandemic. Organic growth remains the top growth driver at 68 per cent, but has been on a steady decline since 2015. There has also been a spike in the second-highest growth driver, partnerships, at 16 per cent, which is largely driven by services (both B2B and B2C).
Most companies (85 per cent) also noted the level of domestic budget either remained the same (67 per cent) or increased (14 per cent), demonstrating a clear focus on the domestic market. Sales over the Internet have grown to the highest level in the survey’s history (19 per cent), marking a trend in more companies selling online. This is in line with the shift to virtual channels during the pandemic.
Marketers’ COVID-19 preparedness
The survey found marketers were split in their level of preparedness for the pandemic (mean 3.8) and relied heavily on improvisation (mean 5.6, both on 7-point scales) to generate new strategies. Most marketers used internal resources more than external resources to guide their actions. Key objectives during the pandemic included building brand value that connects with customers (34 per cent) and retaining current customers (33 per cent), more than improving ROI (3 per cent) or even customer acquisition (14 oer cent).
Considering marketing opportunities, marketers shifted resources toward building better customer-facing digital interfaces (61 per cent), transforming their business models (56 per cent), expanding into new offerings (42 per cent), and building partnerships (41 per cent) over new markets, new capabilities, new automation and data integration.
Marketers believe these strategies will be important long-term opportunities for their companies and indicated their COVID-19 marketing strategies have worked well in the short-run to keep their companies afloat (5.1 on a 7-point scale). They were even more positive that these strategies will help them survive in the long-run (5.5).
When it comes to new digital offerings introduced during the pandemic, marketers reported increased openness among customers, increased value placed on digital experiences and greater acknowledgements of companies’ attempts to ‘do good’.
Looking in more detail at crisis-related spending, many companies observed lower likelihood to buy and unwillingness to pay full price, both of which contributed to the depressed financial performance over the last two months. On a brighter note, marketers anticipated many consumer behaviours will return to normal levels in six to 12 months. At the same time, owing to deeper experiences online, marketers believed customers’ increased value placed on digital experience will stay high and never return to pre-pandemic levels.
Marketers predicted customers will place a higher than ever value on trusting relationships, with 29 per cent stating it will be customers’ top priority. Marketers also anticipated customers will pay more attention to low prices than they have in the past, with 18 per cent citing this as customers’ top priority compared with only 10 per cent this past February.
Marketers reported major losses in the past two months across sales revenue, profits and customer acquisition, but expect all three to rebound within the next year. Biggest losses are to sales revenue, which dropped 17 per cent, on average, during the pandemic.
Looking ahead, marketers anticipated customer acquisition to grow 7 per cent, revenues to increase 4 per cent, and profits to expand 2 per cent over the next year. Smaller companies also expected to rebound faster, likely due to their ability to be nimble.
Some 30 per cent of marketers, the largest segment, have experienced no change in their overall marketing budgets during the pandemic. On average, marketers report they have gained about 5 per cent in overall, digital and non-digital, budgets in the past two months. These changes are expected to return to pre-pandemic levels for non-digital budgets in six to 12 months, whereas digital budgets are expected to return within one month.
Comparing changes in marketing spending in the prior and next 12 months to February 2020 reports, the survey found a reduction in marketing budgets over the last year from 5 per cent in February to 0.9 per cent in June.
Similarly, expectations for marketing budget growth in the next 12 months were 7 per cent in February and dropped to 1.6 per cent in June. Finally, while spending on CX has risen, training spending has fallen about 24 per cent from its highest level in August 2019.
The survey included 274 responses from marketing leaders at US for-profit companies at VP-level or above, and was active from 5 - 27 May 2020.
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