A Message for Your Budget Deniers — Don’t Abandon Marketing in 2023

A Message for Your Budget Deniers — Don’t Abandon Marketing in 2023

Gianna Callioni
. 27 Jan 2023 . 7 min read

We’ve all faced a great deal of uncertainty over the past few years and it’s clear the upheaval won’t ease up any time soon. Businesses across the globe have had to manage unprecedented (couldn’t help it, sorry) pressures on their day-to-day operations, from extreme supply issues, unpredictable demand, inflation, huge increases in hard costs… the list goes on. As a marketer, there’s been a burden to accomplish more with less — ‘we need to cut your budget, but you need to keep making us money. Lots more money.’

As you kickoff 2023 in the heart of the cost-of-living crisis, it’s highly likely you’ll need to advocate even harder for your marketing budget. Klaviyo research suggests 6 in 10 small to medium sized businesses will freeze or cut their marketing spend this year.

But, what effect will that have on those businesses? And how can you convince your budget deniers there are better alternatives?

As Dr Simon Broadbent put it,

“The sales of a brand are like the height at which an airplane flies. Advertising spend is like its engines: while the engines are running, everything is fine, but, when the engines stop, the descent eventually starts.”

Message 1 — Don’t Abandon Marketing

The simple fact is the longer you go without exposing your target audience to your brand, the more likely it is they’ll forget about you. All of the familiarity and trust you’ve built up over time (and all the advertising dollars that have gone into doing so), could go to waste.

There’s been proof of that in the past three years alone.

A release by Nielsen in 2020 (right around when the spicy cough was really ramping up) stated, “brands that go totally dark for the rest of 2020 could be facing revenue declines of up to 11% in 2021.” And you know what? They were right.

In early 2020 (pre-WHO declaring a pandemic), I worked with a client who was three months into a six month contract with several influencers. When the news broke, they wanted to cancel those contracts and stop advertising. Their umbrella company’s annual revenue fell 11% in 2020 compared to 2019. And they sold booze. A household staple after toilet paper and hand sanitiser.

Conversely, brands ‘that increased advertising during a recession experienced higher sales, market share, or earnings during or after the recession.

You’d be right in thinking this isn’t true for every business. Of course, every business is different. If you’re a large business in a growth period, you’ll likely appear fine for a couple of years. But if you’re smaller or more stagnant in your growth already, please don’t abandon marketing.

Message 1.5 — Remember That Marketing is More Than Just Advertising

It seems like everyone has collectively forgotten that marketing isn’t just running ads. Including marketers themselves.

Mark Ritson calls it the ‘tactification’ of marketing. The selective memory loss regarding the rest of the marketing mix. The belief that marketing and advertising are ‘the same thing.’

At a time like this, it’s so very important to remember that marketing has (or at least, should have!) access to the other levers of product, price, and place… not just promotion.

Les Binet wrote an excellent (and very detailed) article specifically on the importance of price, and how we can respond to market pressure with price. But, of course, without sacrificing brand equity.

Message 2 — Leverage Available Share of Voice

That’s enough of the tough stuff… there’s hope for us yet!

Other brands pulling back on advertising can mean it’s cheaper and easier for you to reach your audience. Say you have 35% share of voice and your two competitors have 35% and 30%. They decrease their advertising by 10% and 15% respectively. Now there’s 25% of the market share that’s yours for the taking. That’s a very simplistic way of putting it and, unfortunately, it’s not quite as easy as that, but you get the gist.

If you skipped over it earlier (it’s ok, we all do it), 6 in 10 small to medium sized businesses will freeze or cut their marketing spend in 2023. Think about how much that will open up advertising channels for your brand to cut through. Particularly digitally, where a large chunk of your costs are directly related to how much competition you’re up against in that moment.

By continuing to advertise, you’re able to leverage the newly available share of voice and build yourself up compared to your competitors.

Message 3 — Build Your Brand Image

“Building brands is not an expense, it’s an investment and it needs to be prioritized. It’s not a choice, you have to build strong brands if you want to have a strong business.” — Brent Smart

This isn’t about boldly (and blindly) spending more than your competitors for the sake of it. It’s about carefully selecting and balancing where and what you spend. To do that effectively, you need to have a good read of the market, macro and micro factors, and competition.

It’s an oft-ignored fact that advertising is about more than just short-term returns; when done well, it also builds long-term mental availability. Consider the customer awareness funnel — unaware, problem aware, solution aware, product aware, and most aware. Building your brand image gives you a better chance at being well-positioned during the solution, product, and most aware stages. Without filling up those earlier points of the funnel, you’re less likely to experience the conversions at the bottom of it.

Even if your ads don’t get paused completely, you may be asked to only spend on conversion campaigns (it’s not an uncommon request). If you do, it’s very likely that this reduction of coverage will be at the detriment of your brand’s reputation and goodwill. Consumers don’t want to be sold to constantly, so if your only messages are sales messages, well… good luck. Yes, you might see an uptick in response rate, but at what long-term cost?

Consider how you and your company would like people to see your brand in 3, 5, 10 years’ time. What does that look like? Are you the go-to choice for your audience? The most trusted option? Do they want others to know they use your product? This should inform your next steps.

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Opportunities for Australian Businesses in The New Zealand Market

Sequoia Cardoso de Sá
. 22 Jun 2022 . 4 min read

For Australian brands breaking into the New Zealand market there is incredible potential. The share of online spending on overseas retailers is 45%, with overseas outlets potentially overtaking local online retailers in online sales within New Zealand.

Since New Zealand is a smaller nation, with roughly 5 million people, there tend to be fewer options locally for some industries. Australia, with more major cities, a much larger population and a more competitive business environment has more variety and a greater range which, when these options ship to NZ, benefits Kiwi consumers.

51% of New Zealanders have minimal or no trust in online retailers, so building trust with customers will be paramount to any Australian retailer that wishes to tap into this neighbouring market. Loyalty programs, showcasing product ratings and placing reviews front & centre boosts consumer confidence and are highly valuable and vital aspects of selling online.

New Zealand customers will be turned off a brand, or lose trust, due to:

  • Inconsistent customer service
  • A poor refund or return experience
  • Poor treatment of employees
  • Brands that are difficult to contact or fail to offer access to real people
  • Hearing bad stories from other people
  • Expensive shipping

In fact, 74% of New Zealanders agree the behaviour of a company is just as important as what the company sells so being an ethical company also matters – not just having a great product.

It’s important for us to mention the fact that Kiwis are increasingly turning to local shopping to support the economy after lockdowns, which is a great thing domestically. For Australian brands that sell something that may be widely available within the local NZ market already, it may be more difficult to cut through. However, as mentioned above, in some industries there are limited options for Kiwis. They may not find a local store that sells the style of dress they are looking for and may turn to an Australian boutique that offers free shipping to NZ. Likewise, they may be searching for a very specific high quality natural product and struggle to find it locally, so they will turn to Australia to see if they can have it shipped. If they have a positive experience, they become loyal customers.

Likewise, if they cannot find particular food (long-lasting) prices locally, or those food prices are jacked up because of lack of local competition, those customers may find those products on Amazon or from an Australian stockist instead for a better price (think tea, powders, dried products etc.). In fact, many prices for food-type items or health products tend to be cheaper in Australia as the market is more competitive. In New Zealand, where there may be a lack of competition, some companies will exponentially increase their prices. Our New Zealand-based team member found a tea on Amazon Australia for $17 that was $30 from a local kiwi stockist. For this reason alone, many Kiwis may find themselves checking Australian prices to compare their options.

One of the largest barriers to entry is shipping prices. Consumers don’t like to pay for shipping with most preferring to pay a slightly higher price on the product but to receive free shipping. There are various shipping providers within both New Zealand and Australia, many of which have seamless integrations with Shopify, Neto, NZPost, etc.,

From what our team has witnessed, a couple of industries that have the greatest competitive advantage in the New Zealand market are:

Australian clothing boutiques

We have staff in New Zealand and have been growing within the market. One thing we can anecdotally confirm is that many Kiwis (before covid) would jump onto a plane and travel to Melbourne for a weekend to shop. They would jump across the ditch with a mostly empty suitcase just for a shopping spree because many Kiwis feel the options in Australia are better (and there’s definitely more variety!). While that habit of heading to Melbourne or Brisbane for a shopping spree practically ceased back in 2020 & 2021, those retailers can still reach their New Zealand customers and find new ones thanks to online shopping. Whether we see Kiwis flying to Aus for their fashion needs in 2022 is not entirely known yet.

Australian health & wellness products

Natural health & wellness products can be competitive depending on what the product is. For example, New Zealand is known for certain herbal products and for those there is no shortage. However, there are some health & wellness products that Kiwis lack options for and these products are where you will often see price hikes.

Other Industries & Sectors Have Opportunities Too!

There are definitely opportunities for other brands & sectors as well, but these are two types of businesses that can generally offer free or affordable shipping rates due to smaller/lighter parcels and can be beneficial to the local market. A great opportunity also lies with brands that sell a product that’s not available within the local NZ market at all, or where there’s a bit of a monopoly with only one stockist or brand selling a type of product.

How to break into the New Zealand market?

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