Will advertisers listen to sermon on budget sustainability in volatile times?

After the 2016 first quarter, the broad doors of business engagement, especially in the marketing communication industry opened in April/May. Within this period, stakeholders in the marketing community engaged themselves through various summits on the way forward in turbulent times.

One of the common underscores in these conferences was the sermon to advertisers to sustain marketing communication budgets without succumbing to the usual temptation of budget cut this time of economic volatility for consumer engagement.

The advertisers, of course know the importance of consumer engagement – for market share, brand loyalty and profitability, still they cut or allow the cut in their communication budgets during difficult time when experts say they actually should be engaging the consumers.

During recession, there is always thinking and big debate in the boardrooms on strategies for business to stay afloat. The general thinking is that since consumers are rationalizing their purchases during difficult times, what is the need then of engaging in more advertising. This argument is supported by the fact that advertising is not the major factor during recession and also there is shrinking revenue. The director for marketing vote in the boardroom may not count here.

With this overwhelming opinion, marketing budget becomes the first casualty to be trimmed on the belief that “After all, it is not as if the brand’s  media presence will disappear overnight, or a company’s customers will suddenly forget all about it after years of marketing”, says  Sheila Johnson”, marketing expert.

Chairman of Troyka Group, Biodun Shobanjo, in a recent interview with BusinessDay also linked the quick budget cut to the intangibility of advertising as a product as the exercise impact may not be felt instantly.

While brand custodians, especially the decision makers need concrete and justifiable evidence to be converted with the sermon not to cut their marketing budgets during recession, the recent conferences in Lagos however urged them to maintain  their spending during recession as they stand to reap from such tough decision.

Speaking at Advertisers’ Association of Nigeria (ADVAN) marketers’ conference in Lagos, Lampe Omoyele, Managing Director of The Nielsen West Africa, a brands and marketing research company told advertisers of the importance of building their brands in the minds of consumers always.

Lampe was however not against adjusting market budgets up or down during recession but he counseled that what  the best brand custodians could do is to “continue to hold their existing market share by ensuring that people who are currently consuming their brands keep on doing so through quality and market engagement”

At a separate forum on ‘branding in a volatile economy’, organized by Brandzone Consulting, the firm’s managing partner, Chizor Malize said “as the nation grapples with the impact of dwindling oil fortunes, devalued currency and weakened economy, there is no better time to become more creative with brands and branding for quality, competitiveness and growth”.

In her opinion, “the marginal propensity to consume and the disposable income of consumer in a wobbling economy are shrinking due to the prevalent uncertainties. Consumers become more discerning and selective in their consumption habits owing to the lull in the economy. This also has impact in sales and revenue and therefore further weaken corporations overall performance.  It therefore behoves the practitioners and brand owners to innovatively and strategically connect their brands with the consumer minds to remain relevant and ensure continuity in patronage, growth and profitability”.

Also speaking at the forum, the President of Nigerian Stock Exchange, Aigboje Aig- Imoukhuede who spoke on  ‘Leading Growth in volatile times’, provided key elements imperative for growth in a receding economy. He charged participants on the need to look at the brighter side of the current economic realities in Nigeria. In his words, “volatility does not connote negativity in the strictest sense, and it holds out as the best time for bold, discerning leaders to identify potential opportunities and key into it”.

Iquo Uko, former director of sales and marketing, Nestle Nigeria Plc, believes on the need for brands to be daring and consistent. She revealed that opportunities abound for organisations that dare to remain where others dread to operate.

The entire sermon requires consistent marketing budget even in difficult time and to maintain consistent budget also requires convincing, converting and carrying all the management members along. If not, corporations will not listen to the sustenance in marketing budget.

Daniel Obi