This morning in London, on the day of the results, there is an overriding emotion of surprise. Clearly we knew Brexit could happen but it seems most people didn’t actually believe it would. The debate around using a referendum to make such an important decision will continue but the facts of today cannot be changed. As an un-united country we have chosen our path and now we must work together to re-unite and get through the challenging months ahead.
The FT writes today “the UK, the vote has turned conventional wisdom on its head” and is not apologetic in its view that “This vote will damage the economy and weaken Britain’s role in the world. It is also a devastating blow to the EU.”
However, some of the leading city players such as Neil Woodford take the view that “whilst markets are shocked it’s not as negative development as the initial reaction seems to imply” and he goes on to write “the UK and World economies will not be influenced significantly by today’s outcome”.
So what now for business & marketing?
At this stage there are many unkowns, the only consistent view is that uncertainty will result in short term market volatility.
The case for strong marketing
We like the learnings from Vincent-Wayne Mitchell, Professor of Consumer Marketing, Cass Business School, London. We believe he makes some pertinent points in his paper entitled "Building the case for preserving or increasing marketing budgets in a recession". We will leave the views of whether we’re entering a recession to those far better positioned to have them than us, however we do believe Professor Mitchell makes valid marketing points that are worth considering for the months ahead.
The highlights are here…
- Businesses have a natural requirement to make cut-backs in economic downturn, however if marketing spend can be kept or even increased a company can achieve a greater share of ‘voice’
- Advertising increases both the salience of the business to customers and the perceived brand quality;
- very importantly, counter-cyclical promotion boosts client confidence, helps overcome inertia and sends reassuring signals to concerned customers;
- it reinforces the reasons for brand choices in uncertain economic times and helps justify premium prices;
- it attracts the increased numbers of ‘brand switchers’ who are less loyal and more opportunistic in a recession, if more promotional spend is put into call-to-action and point-of-sale-oriented activities; and finally
- market share is easier to get as competitors are too hard pressed to defend their position vigorously.
Increasing brand salience and boosting confidence
One campaign in particular we admire and believe we can learn from is what Blackrock did in the economic downturn post the 2008 financial crash.
In case you don’t know it, their campaign was called: “So what do I do with my money?”
Incredibly clever on many fronts but mainly for its simplicity. At that moment in time investors were struggling for answers with interest rates at rock bottom, markets stagnated and risks everywhere, Blackrock managed to capture the question on their customers’ lips.
By doing so the brand demonstrated understanding and provided strength, common-sense, intelligence and reassurance all at the same time.
It proved to be a success.
Interesting and challenging times are ahead and whether you’re an inny or an outty it makes no difference now, we are all going to need to knuckle down and work through whatever is ahead of us.
Here at Embrace we will be applying ourselves in our work and we look forward to helping the winners of tomorrow with their creative communication. One thing is certain, in the face of adversity it’s the brave & strong brands that will prosper.