FanFinders

It’s time to reallocate your consumer marketing spend

From challenge to opportunity: FanFinders’ co-founder Adam Gillett explains why brands in baby and parenting shouldn’t reduce their consumer marketing budgets, but instead change how they are spending them.

At the height of the pandemic, UK marketing budgets sustained their biggest cuts in more than 20 years. Now, with soaring inflation and many businesses reporting slow consumer demand as wages fail to keep pace, we are facing the recession that has already hit the US and even more uncertainty.

And is it any wonder that marketing spend is an easy target? Digital costs are rising. FanFinders’ LinkedIn poll last year found that Facebook advertising costs have increased substantially for 87% of marketers since the start of the pandemic.

When you add the context of complicated privacy wars (which many point towards as the reason for digital media becoming more expensive), more people bidding against your cost-per-click (CPC) campaigns on over-saturated platforms and IOS changes meaning Facebook has access to less data, the result is rising, unsustainable acquisition costs.

For companies and their financial decision makers, this picture can make it tempting to pull the plug on your marketing. Instead, it’s time to assess your existing goals and make smart marketing decisions, seizing a huge opportunity for growth.

History favours the ambitious

During the recession of 1981 to 1982, businesses that maintained or increased their marketing spend grew by 275% over those that cut back. In 1991, companies that boosted their marketing budgets generated a 70% increase in sales by the time the recession ended.

After the dot-com bubble burst in 2001, those who sustained marketing efforts had over double (2.5x) the sales of brands who cut back.

And what about during the Great Recession of 2007 to 2009? You guessed it – those brands who consistently achieved higher net profits were those who managed to keep spending on marketing and advertising.

More recently, only 8% of customers thought brands should stop advertising during the pandemic, which suggests that even during times of strong economic distress, marketing has a key role to play in strengthening both brand trust and conversion.

Our industry is unique

When considering how a diminished marketing budget could impact your business over the long- or short-term, it’s also worth reflecting on the unique dynamic of the baby industry.

Our market isn’t set up like the motoring and travel industries, where consumers might cut costs, make snap lifestyle decisions or decide to postpone their big holiday for a few years.

While people are continuing to have children, there is a constant flow of new potential customers entering our sector and therefore your business will always have to keep feeding your marketing funnel or you will lose out.

This isn’t about deciding whether or not you still want to be spending on fluffy brand adverts, this is about having to acquire new parents as they come in or knowing that someone else will.

Finding the solutions

Too often we hear that companies’ marketing strategies haven’t evolved because ‘they’ve always done it this way’. So, is your ‘current way’ the ‘best way’? Or is there a more cost-effective option?

You should be reallocating your marketing spend where it matters most. In the baby market, where new customer acquisition and incentivising people simply doesn’t stop, there are opportunities for consumer product brands to gain market share over the coming months.

There are new parents coming into our market every day and they don’t have a choice. They are still going to need new prams, cots, nappies, wipes, and many other essential products.

Businesses should be feeding this funnel and in a way where they can see direct ROI and value for money from their spend.

We’re not saying don’t develop new content or increase your value proposition for consumers, but make sure that any activities have a directly attributable ROI or ROAS.

Strategic partners are crucial to this. With a relevant partner who understands your industry, you can look to achieve your goals and reduce the amount of money going to waste. And, given the inverse relationship between cost and scale, where biddable media has made it more expensive for every thousand new customers you want, less can definitely be more.

By fixing at a rate (on average 20% cheaper with a specialist partner than at scale acquisition via biddable media) that is affordable for your business, you pull those people out of the marketplace and reduce your acquisition costs by stopping them rising elsewhere. This means better balance and the chance to grow.

Rather than cutting your budget, it’s time to stop those pure brand activities and focus on getting new customers. Then go on the attack in 2023.

Brands and retailers can try FanFinders pay-on-results partnership marketing to mums with a no-risk, no-obligation one-month trial.

Adam Gillett, Co-founder, FanFinders

FanFinders is a performance marketing company that connects brands with parents via Your Baby Club in the UK and US. Find out more at fanfinders.com or contact info@fanfinders.com