How marketers grapple with shrinking budgets amid coronavirus pandemic
By SEB JOSEPH
April 9, 2020
The planning process for marketers is being thrown into disarray. With uncertainty pervading all aspects of business, marketers are forced to pare down their plans and focus only on a month or two head. Annual plans are, for the most part, a relic of a different era.
“In many cases, we’re either in re-planning mode or ring-fencing budgets for certain brands,” said the chief media officer at global CPG manufacturer.
So much so that the company’s media plans are being revised weekly as the business responds to the impact of the pandemic. As the chief media officer said: “When you’ve gone from a €25 million ($27 million) media plan and it goes down to €12 million ($13 million) then that’s a different plan in the sense that a channel like TV is no longer affordable.”
Usually, the chief media officer is in control of those revisions or at least has more influence over the final outcome. But with so many unknowns on the horizon, the CEO and CFO are the ones in control of advertising and media dollars, said the chief media officer. Now, the chief media officer acts more like an advisor to those execs, similar to what agencies do for the company’s in-house media buyers.
From there, the chief media officer has to propose a certain amount of investment for a promised return, which is also known as zero-based budgeting. In normal circumstances, this approach is arduous but straightforward. The business decides how many media dollars should be allocated to each marketing plan based on the marketing team’s assessment. But the coronavirus is having an extreme effect on everything. And what little market data there is on how those effects influence media investments has a short half-life.