It should come as no surprise to any marketer that 2018 is likely to be a tough year. According to Marketing Week, media agency groups have both cut their growth forecasts for next year, while the major agency holding groups are seeing revenue growth either slow or decline as advertisers tighten their belts.
The major FMCG firms and their increasing focus on efficiency are part of the reason, but their strategy is already spreading to other sectors, with Marks & Spencer, for example, one of a growing number of brands reducing marketing spend.
Next year is only expected to get more volatile, as pressure on consumer spending means marketers will also have to be careful that their investments have a laser focus on supporting and growing sales.
Inflation is rising, interest rates have just been raised for the first time in a decade and consumer confidence is on a knife edge. At the moment, consumers are happy to spend on credit, but that cannot last forever, and they are becoming increasingly worried about the state of the economy amid Brexit uncertainty, as well as more global issues.
Against this backdrop, marketers will have to become more accountable, explaining to the rest of the business how, where and why they are spending their often vast budgets.
The scandals around media transparency and programmatic advertising over the past two years have thrown into sharp relief the fact that, all too often, marketers didn’t know what was happening with their money. The rest of the C-suite will not want to see marketing spend hitting the headlines again for all the wrong reasons.
Alongside transparent spending plans, marketers will be expected to do more with less, leading to an increasing emphasis on marketing effectiveness. According to the IPA, companies are already increasing their resource in this area, with many including Diageo, Samsung and Telefonica setting up their own specialist effectiveness units. The prevalence of zero-based budgeting in marketing departments will also continue to rise.
Not every company has the time or expertise to go as far as this, but any marketer that cannot explain where, how and why they are investing will face an increasingly tough time in 2018.