Marketers Are Adjusting Their Brand vs. Performance Budgets Amid Economic Woes

December 19, 2022

Marketers around the world expect to be making adjustments to the balance of their investments in brand versus performance over the next year, according to results from WARC’s 12th annual Marketer Toolkit [sample registration page].

The survey of more than 1,700 marketers around the world finds that 31% will rebalance their investment toward brand over the next year. That represents a rebound of sorts: while in 2019 40% planned to increase their brand investment relative to performance spending, that share fell to 30% in 2020 and to just 23% last year. CMOs in the US have also of late been forecasting growth in their brand building spending.

Somewhat surprisingly, though, this rise in brand spend won’t necessarily come at the expense of performance budgets. Instead, in this latest survey, an even greater share (46%) of respondents said they would rebalance their budgets by investing more in performance. This too is up from last year, when 41% said that would be the case.

What has shifted is that only about one-quarter (24%) this year said there won’t be a change in the balance of their investment in brand versus performance. That’s down from 36% last year who planned to make no change. In other words, more are making changes, and while some are doubling down on brand spending, others are putting their money behind performance.

One reason for adjusting spend is to manage the economic situation, per the report. Indeed, marketers are shifting their strategies to account for consumers’ inflation concerns, and this latest report indicates that a sizable chunk cite their adjusted brand versus performance spend as a strategy to deal with the situation.

The economic situation certainly has risen in stature in marketers’ minds relative to last year. When asked how important a variety of societal topics and consumer concerns are in terms of their impact on 2023 marketing strategies, fully 95% of respondents indicated that economic recession will have either a significant impact (63%) or some impact (32%) on their strategies. While last year a comparable 92% of respondents cited at least some impact, considerably fewer (49%) said that this would have a significant impact on their marketing strategy for the coming year.

No other societal topic or consumer concern is believed will have a significant impact on marketing strategies by a majority of respondents this year. Nevertheless, marketers around the world do feel that they will need to take into account a variety of issues when crafting their plans. Four in 10 (down from 48% last year) said that the environment – conscious consumption, sustainability and climate change – will have a significant impact, while an additional half (49%) believe this will have some impact.

Close behind, 39% feel that data – privacy, consumer’s control over their data, ethical internet – will have a significant impact on their strategy, and another 47% expect this area to have some impact.

Looking at some other areas covered in the report and how they compare with last year’s results:

  • More respondents this year (37%) than last (30%) believe that brand safety issues will have a significant impact on their marketing strategies in the year ahead;
  • Fewer this year (29%) than last (39%) feel the same about wellness, such as mental health, self-care, burnout, and stress; and
  • About one-quarter (26%) expect that escalating geopolitical tensions will have a significant impact on next year’s strategy, almost double the share (14%) from last year.

For more, register for the sample of the report here.

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