The current economic climate of stagflation has meant that marketing budgets are under more pressure than ever.
Depressed economic growth has seen consumers tighten their belts, while cost inflation has eaten into company profits, and, in turn, put pressure on marketing budgets from savings-hungry Chief Financial Officers (CFOs) looking for efficiencies.
There is now a greater burden on the Chief Marketing Officer (CMO) to prove the impact of their spend, with an ever-increasing demand to articulate short-term business outcomes at the expense of focusing on what drives long-term sustainable business growth.
At the same time, short-term performance marketing effectiveness has declined by 62% over the past two years, with it becoming harder to stimulate an immediate response from cash-strapped consumers.
The knock-on effect has been that marketing effectiveness is below pre-pandemic levels for the second year running, according to the Data & Marketing Association’s (DMA UK) Effectiveness Databank.
It’s all too easy to blame the external macro-environment without considering what the cause of this effectiveness decline might be a little closer to home. One key contributing factor is sub-standard measurement practices.
If we are not measuring the right marketing outcomes, then how can we hope to arrest this decline in effectiveness by optimising future marketing spend?
The DMA is calling on marketers to prioritise implementing effective measurement to combat the industry’s worsening measurement crisis. Identifying and communicating marketing effectiveness have become complex tasks, but they don’t need to be.
