“In the short term, media spend has largely remained committed, or diverted to alternative channels, although we have seen an increasing volume of cancellations. Project and retained work has continued in most sectors, but activity has begun to decline.”
This is the view of the world from WPP as the advertising giant unveiled plans to protect its balance sheet during the current turbulence. They're not alone either in their assessment. Many industry commentators paint a picture of decreased purchasing intent, adjusted budgets, and a desire among businesses to minimise cost.
So what is the data saying about the impact of this downturn on marketing?
News that should hardly come as a surprise granted. But is it an accurate appraisal of the situation? There might be a lot of talk about the current state of play, but much of it is based on ‘gut feeling’ and emotion, rather than the cold hard facts. That’s why we’ve pulled together a snapshot of current performance statistics, to offer you a clearer view of exactly what’s happening.
So let’s get started.
Cuts but no slashes
The lockdown we’re experiencing was always going to have a big impact on the global economy. Estimates currently predict a cost as high as $2.7 trillion. No wonder businesses have become conservative. In fact research from Econsultancy and Marketing Week suggest 86% of UK-based marketers are delaying or reviewing campaigns.
That said, the expectation is that budgets will not be slashed. A survey from B2BMarketingZone highlights that two thirds of marketers expect their marketing budget to either stay the same or suffer only moderate cuts (less than 20%). For larger enterprises, there’s even greater confidence that budgets will remain stable – at least for now.
A lack of interest
What about demand? Here the numbers are cause for greater concern. For example, research from Hubspot tell us that:
The number of new deals being created has fallen globally by an average of around 20%
A similar percentage (21%) also highlights the fall in closed deals
Data for the UK suggests that as many as 69% of UK businesses are experiencing a drop in demand (a figure that jumps to 77% for SMEs)
Information from the Bank of England also highlights ‘reported cancellations of consultancy projects – even by large corporations’ in the business and financial services sector.
Obviously such figures are dependent upon the products and services your business offers, and there will be winners and losers (supermarkets for example have seen a record 20.6% rise in sales during March) as we eagerly await the predicted ‘bounce back’.
The state of play
Drilling down now into performance, what’s the data telling us about current activity?
To return to the Hubspot research:
B2B email traffic has increased by around 29%
Response rates have decreased throughout March by a total of 27%
Open rates have gone up by about 21%
These are numbers validated by the campaigns we’re currently running at Quantum Marketing, where:
Email open rates to European contacts continue to rise in April, and are up by 24% in the last 3 months
Email open rates to US contacts are up even higher, with an average of 26%
What this tells us is that buyers are more open at present to hearing about new opportunities. Yes deal volumes are down, but there remains the mindset that once the lockdown measures are lifted a ‘running start’ is vital for a fast recovery.
Let’s finish by looking at responses. Prior to the emergence of a global pandemic, nearly two-thirds of companies planned to spend at least 20% of their marketing budget on physical events (81% planned at least one a month). With face-to-face no longer an option, the money saved is being directed elsewhere, with the most popular options being:
The production of more content (43%)
Hosted and sponsored webinars (40%)
Search advertising (33%)
Social media ads (27%)
Focusing in on what works
Then there are on-going campaigns. As data from the Econsultancy/Marketing Week confirms; 62% of marketing strategies have changed due to the current crisis – with only 14% of activations going ahead as planned. In addition, the numbers suggest that nearly two thirds of marketers are also experimenting with new messaging.
All of which is good news. As Hubspot report, monthly website traffic was up 13% in March, and with increased eyeballs come the opportunity to dial up both your short-term lead generation and longer-term brand building – as our recent results confirm:
· Tech firms focusing on education over the hard sell are seeing better than average results
Those including the human touch and actually talking to prospects are finding less gatekeepers in play – and greater willingness to talk
Audiences are also responding well to more emotive, caring, purpose-driven activity
And as our client are telling us: they may be unable to shorten sales cycles, but they can build the interest needed to create a burst of activity when we return to something like normal.
The statistics shown above help confirm what we already know: B2B marketers are currently on the back foot. Few are confident they have the magic formula for maintaining demand, and are focusing instead on the immediate: shifting budgets to increase top of funnel activity while playing around with their messaging.
Amidst the numbers however exist opportunity. One recent study (granted it was completed last year) states that 14% of companies have been able to accelerate growth during the past four recessions.
OK, maybe 14% doesn’t inspire confidence, but it should point to the fact that many companies will survive and thrive – with marketing seen as a key driver of growth. Particularly those who use this time to get disruptive (see our previous article on the topic), to put creativity first in a bid to grab the attention of audiences, and to find meaningful ways to engage and support customers.
At Quantum Marketing we’ve got a host of ideas for making this happen. From support for turning your event plans digital, to channel partner enablement, ABM, and lead generation capabilities, our services are designed to help tech brands engage with senior decision-makers across a range of diverse markets.