As the economy goes down, should marketing only focus on the effort, not the results?

In recent years, the economy has been on a downward trend. How should marketing be carried out under this circumstance?

There is no need to say anything about the economic environment this year. I have received requests from several friends in my circle of friends to help look for job opportunities. Apart from the recovery of the aviation and tourism industries, there seems to be no good industry. I originally thought that the economy would recover after the epidemic was relaxed, but after waiting for a year, the overall situation is getting worse and worse. The real estate market is just like that, and it is all falling. There is no lowest point in the stock market, only lower.

A few days ago, I saw an interview between Hua Shan and Liu Run, the founders of H&H, discussing the investment and effectiveness of advertising. Hua Shan’s view is that when investing in advertising, one should only ask about the effort, not the results.

Liu Run asked: I have spent 200 million yuan on advertising. How can I know for sure that it is the 200 million yuan that brought the customers and the effect? ​​Hua Shan answered: I know what it does, but I don’t need to know. People often ask me if advertising is effective? I say it doesn’t matter. If it matters, I would have stopped advertising long ago. It’s not true to say it matters.

I am quite surprised that in this day and age, there are still advertisers who don’t care about the results. First of all, the economy is in a downturn, and I have heard from my peers that advertisers are cutting their budgets, regardless of B2B or B2C. I think the biggest challenge for marketing this year is the reduction of budgets.

After more than a decade of development, China's digital marketing technology, tools and strategies have become very mature. Advertising companies are also flourishing, and their service capabilities are mature and diversified.

In the past, 4A advertising companies dominated the market, but with the continuous evolution of the digital marketing industry, MCN, Martec, small creative companies, social media operation companies, etc. began to participate in the construction of the marketing industry and jointly serve the clients at the top of the food chain. Naturally, the resources and budgets of the clients are the most scarce resources. It is obvious that resources are becoming more scarce, making it more difficult for marketing service companies to survive and make profits.

Given the ever-changing marketing environment, effectiveness should be a necessary condition for contemporary marketing, but not a sufficient condition. In other words, advertising must be based on effectiveness. Advertising with poor effectiveness or unclear definition of effectiveness should never be invested. However, advertising with good effectiveness alone but no benefit to the long-term growth of brand value should not be invested either. This is the meaning of brand-effect synergy that we marketers have been discussing today.

Ten years ago, I was engaged in advertising in the automobile industry under the B2C business model. At that time, for clients like automobiles, a budget of 200 million was really nothing. It was also a bonus period for China's automobile industry, and the advertising at that time was creativity-oriented. Naturally, how you placed the advertising and how you spent the money were right, because car sales were growing rapidly. But this does not mean that the increase in car sales was brought about by your advertising. Maybe it made some contribution, but not all.

There was no such thing as ROI (return on investment) at that time, because there was no way to accurately monitor the results, and there was no massive data support like today. ROI was a mystery, but because the products sold well, everyone naturally believed that advertising also contributed. If there was income, there would be marketing expenses, so it was natural to continue to work hard and invest.

It is obvious that times have changed. First, we have accurate advertising monitoring technology, and second, our entire advertising and marketing industry is undergoing a transformation from creativity to data. Cultivating data marketing thinking and capabilities is the most important ability for marketers today.

In many companies, CMOs are responsible for the final sales results. The sales revenue and sales opportunities generated by marketing initiatives have become the main evaluation indicators for measuring CMO performance. This also explains why the situation of marketing service companies that do not do performance marketing is becoming increasingly difficult. Should they do branding? Of course they should do it, but now there are fewer and fewer sponsors willing to invest purely for brand advertising purposes. Data shows that in China, the proportion of performance advertising is higher than brand advertising, and this proportion is still increasing.

Even when doing brand advertising, many more advanced B2C clients will invest a lot of manpower and budget to measure and track the effects, and establish brand advertising modeling and data collection and analysis systems.

Unlike previous methods of measuring the effectiveness of brand advertising, brand owners are more likely to use consulting companies to do Focus Group, asking users about their perceptions and preferences of the brand, and then drawing conclusions on whether the brand advertising is effective through before-and-after comparisons. This is actually not so accurate, at least the sample size is limited, and its scientificity and accuracy are easily questioned.

From this point of view, companies that simply do brand strategy consulting and creative advertising companies will also need to undergo digital transformation in the future. There is no problem in focusing on brand strategy research and creative advertising, but if there is no data indicator monitoring and analysis model to support the effectiveness of brand marketing, and if there is no certain data marketing capability, then these companies will have much smaller opportunities to obtain large-scale investment from brand owners in the future.

After all, it is natural for brand owners to want to know the actual results after spending so much money. Moreover, some sponsors must see the results before they commit to investing. Nowadays, when business is getting harder and harder and market competition is getting more intense, there are quite a few such brand owners.

When we report to our superiors and strive for budgets, we always hold the view that marketing requires long-term investment, hard work, patience, and time to prove ourselves, and there is nothing wrong with that.

However, we also see that more and more advertisers hope to make small-scale investments first through the approach of "small steps and fast iterations", run through the minimum closed loop through POC (proof of concept) conceptual verification, and then increase investment after seeing the results, making achievements bit by bit to verify that the marketing expenses are spent effectively. It is too little and uneconomical to see a brand say that it wants to invest several hundred million yuan in advertising budget to carry out a brand event. After all, the essence of marketing is to promote sales growth, and this essence will not change.

Against the backdrop of a downward macroeconomic environment, maintaining survival and sufficient cash flow have become the foundation for an enterprise. Product is 1 and marketing is 0. Marketing returns to its essence. It is not about holding a lively event or spending money on advertising, but about trying to serve customers well, helping the enterprise survive first, and generating the greatest economic return with the least investment.

Author: Zhu Jingyu WeChat Official Account: Jade Talks About Digital Marketing