What is ‘All-Weather Marketing’ and how can it help you tackle economic instability?

 

Fears of a looming recession yielded a vast amount of discourse and insights from marketers in 2022. What does the data say? Peter Field of IPA analyzed the business impacts of different marketing strategies during the 2008 recession. He found that marketers who increased advertising during the recession had big increases in long-term profitability during the recovery. Equipped with these learnings in 2023, we are seeing 89% of CMOs and senior marketing executives planning to increase their budget this year. However, there is still an unnerving sense of uncertainty in the industry, and the past few years have demonstrated the need for a thoughtful approach.

Ty Heath, Director of Marketing Engagement at LinkedIn’s B2B Institute, offers the solution of “All-Weather Marketing,” which is about having the resolve to remain steady and committed to investment for the long term, even as external circumstances change. Inspired by famed investor Ray Dalio’s concept of an “All Weather Portfolio,” designed to perform well during both booms and busts, an All-Weather Marketing strategy is particularly valuable for moments like the one we are in.
Heath describes All-Weather Marketing as an insulator against instability, and offers recommendations for how marketers should approach strategy, creative, distribution, and measurement.

1. How can marketers respond during times of uncertainty while still taking advantage of opportunities?

Ty Heath: Marketers are facing some tough macro realities. We’ve got the uncertainty of a current downturn, a historic IPO drought, the Russia-Ukraine war, and various social structures that are unsettled. At the same time, there are still waves of innovation disrupting different industries. It’s a hugely challenging landscape for business leaders to navigate.

This forces us to adapt and show resilience. Let’s remember that there is the possibility for greatness to be born during tough times. People who have lived through multiple cycles of upturns and downturns can offer reassuring perspectives to teams, colleagues, and customers. We can communicate compassionately, keep calm, think rationally, and look at the data.

2. What is All-Weather Marketing?

Ty Heath: While marketers have managed through uncertainty over the past few years, this business cycle is introducing new challenges. An All-Weather Marketing strategy focuses on staying steady and committed to your long-term marketing objectives, even as outside circumstances are swirling around you. It helps combat understandable reactiveness to declining lead volume, and equips marketers with the tools they need to advocate for steady investment and a long-term focus, including practical recommendations for marketers as they determine their strategy, creative, distribution, and measurement plans for the year.

3. What are the strategy recommendations from All-Weather Marketing?

Ty Heath: The most important recommendation is to continue taking the long view. Keep in mind, B2B sales cycles are months long and economic cycles change frequently. It can be hard not to be reactive during times like these, but taking this perspective can help marketers maintain a steady, long-term strategy.
With this grounding perspective in mind, we can start to look at the downturn as an opportunity, rather than a thread. Peter Field, a consultant and well-respected expert in advertising effectiveness says, “brand advertising is not about profiting in a recession, it’s about capitalizing on recovery.” The actions you take now can have outsized impacts on your future profitability, so this is an exciting time for marketers to lean into brand as a long-term play.
Why focus on brand marketing now, when immediate sales pressures are higher than ever? The 95-5 Rule, originally published in How B2B Brands Grow by the B2B Institute in partnership with the Ehrenberg-Bass Institute, finds that 95% of category buyers are out-market at any given time. In a recession, this ratio becomes even more extreme as companies delay purchases, and the proportion of in-market buyers can shrink as low as 1%. This 99-1 reality means it’s critical that marketers invest in strategies to prime future buyers.

And that is the purpose of brand advertising. We know it can be hard to make this case when sales pressures are mounting, but fortunately, there are efficiency gains you can present to your finance team to maintain or secure more brand budget.
Many of your competitors will pull back their advertising spend during this downturn, which means that the brands that are able to invest can more easily gain what’s called “Excess Share of Voice”(ESOV). ESOV looks at your share of voice relative to your share of the market. If your share of voice is greater than your share of the market, your brand will grow. If your share of voice is less than your share of the market, your brand will shrink. It’s typically hard to dramatically move the needle on ESOV since peer spend levels are consistently competitive. But during a recession, competitive spend is likely to drop, giving your brand an opportunity to reap outsized ESOV gains by continuing to invest.

4. What are the creative recommendations from All-Weather Marketing?

Ty Heath: In 2020, IAB surveyed marketers on whether they planned to change their messaging because of the COVID-19 pandemic. Around four out of five marketers said they were thinking about changing their creative. This illustrates a misperception in the marketing community: that the brand messaging we have will cease to connect and resonate with audiences during uncertain times.
Of course, we must be empathetic during economic downturns. But marketers feel a misplaced need to start over and throw everything out the window. Studies from the Covid-19 pandemic show that buyers did not respond differently to the pre-pandemic creative.
This means brands can repurpose some of their best creative and give them more airtime. It’s an opportunity to build awareness with less competition. Some of the most successful marketers have been running the same creative for decades. At the B2B Institute we say: “All-time marketing beats real-time marketing.” Consider ‘A diamond is forever’ from DeBeers. That campaign has been running since the 1940s. MasterCard’s ‘Priceless’ has been running since 1997.

Companies build brands by being consistent over time. By recycling the creative you already have, you stretch your marketing budget, and you can then reallocate that investment to distribution instead. An added benefit is that this approach will likely resonate with your CFO and other executives who are looking for ways for you to stay balanced and responsible.

5. What are the distribution recommendations from All-Weather Marketing?

Ty Heath: With limited budgets, marketers must maximize the distribution of campaigns. Focus on quality and aim for three things: High-quality reach, high-quality contexts, and high-quality attention. These principles are always critical, but even more so when budgets are limited.
Starting with reach, you want to make sure you are reaching the right people. This is especially important in B2B, where successful brand marketing means reaching the category, not reaching the mass market. Move away from places where you are not clear on whom you are connecting with.
Just like you can’t afford to waste dollars on inaccurate reach, you can’t afford waste associated with off-brand contexts. Invest in premium media contexts so your ads are getting the right type of attention in a trusted environment.
Finally, you want quality attention. This means you want ads that users actually pay attention to. Research shows that attention is closely correlated with sales. Aim for ad units that cover most of the screen. Pursue low clutter with prime placement ads that people look at for a long time.

6. What are the measurement recommendations from All-Weather Marketing?

Ty Heath: This is an area where a mindset shift may be needed across the business, starting with marketers. When the economic climate reduces the pool of active buyers, you cannot expect the same immediate conversions and ROI. This makes short-term sales metrics a liability in this environment. But this mounting pressure often leads to reactive decision-making that can actually exacerbate the financial situation.
One example of this would be looking at shrinking sales forecasts, and deciding to ramp up your performance marketing efforts to generate short-term demand. But per our 99-1 insights, there is minimal short-term demand to harvest. The reactive decision is to chase short-term gains that aren’t there. The proactive decision is to accept the financial situation, hunker down, and invest in strategies that position you for long-term growth during the recovery and beyond.
To manage for the long-term, we must measure for the long-term. And this means measuring for memories, not for clicks.

Consider measuring for memory by measuring for situational awareness, or mental availability. Situational awareness is built by linking your brand to specific buying situations over time, i.e. by building brand-relevant memories. Our research, Category Entry Points In A B2B World, is a deep dive into managing and measuring for situational awareness. It asks, “in what buying situations do I want my brand to come to mind.” It offers a suite of mental availability metrics you can track to measure your progress toward these objectives over time.

The three mental availability metrics to measure are mental penetration, network size, and mental market share. Mental penetration is how much of the category you’ve penetrated to any degree. It’s the percentage of category buyers who link your brand to at least one category entry point. Network size takes us a step further. Of the category buyers who link your brand to one category entry point, or buying situation, how many Category Entry Points do they link your brand to on average? Finally, mental market share brings the two together to paint a full picture. Of all the brands’ situational linkages that exist in your category (mental penetration multiplied by network size across all brands) what share of the category situational linkages belong to your brand?

Finally, we need to even look beyond general sales and marketing outcomes, and acknowledge that brand investment supports other areas of the business as well. For example, strong brands enjoy more favorable talent and investor outcomes. That’s why we liken brand to a “compounding asset” – as brands grow, their benefits grow exponentially. We recommend marketers get creative to earn proper acknowledgement here. Work cross-functionally to find ways to attribute successes in other areas of your business to the brand-building work your team is doing. There’s an opportunity for us to advocate for long-term thinking and to claim additional stewardship over other areas of the business.

7. What other guidance (including from the 2008 recession) can help marketers cope with an uncertain future?

Ty Heath: Take care of your people and your customers first. Don’t panic and withdraw brand advertising. Resist the pressure to switch to sales activation. It’s not that customers are reluctant to buy, many literally can’t at this stage. Moreover, don’t be afraid to use emotional framing in your brand advertising. Emotion grabs attention and builds memory, but of course be cognizant of general social sentiments. Advertising that demonstrates humanity through warmth, generosity, and humor is impactful. Look for opportunities to create goodwill through acts of humanity and generosity.

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This article is written by ClickZ and originally published here.

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