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Pressure on Margins = Pressure on Marketing
Tom DenfordFeb 16, 20233 min read

Pressure on Margins = Pressure on Marketing

Brands Deserve Better Media

A weekly column from @tomjdenford



‘Quality’ is our word of the year for media and advertising in 2023. 


You might be surprised by that. In this uncertain economic climate, why don't we use words like ‘cheaper’, ‘discount’, and 'savings’ as more suitable beacons for marketing success?


When times are tough, it's very tempting to start negotiating - looking for cheaper talent, cheaper ads and cheaper media - hoping to reinvest any savings into more advertising, or simply adding it straight to the bottom line.


Well, sadly it doesn't work out like that. Because the trade off is usually slower growth. Lower quality advertising gives lower quality results. We all know that. 

So why will ‘quality’ be such an important strategy for 2023?


Supply chain issues are still affecting most companies' operating margins. Raw material shortages remain a challenge, keeping prices higher than pre-pandemic levels. The natural temptation is for companies to cut back what they might call ‘non-core’ or discretionary costs in marketing and encourage their brand teams to look for cheaper routes to reach customers.


It's completely understandable; companies typically want to avoid passing cost increases onto their consumers if they can, but that creates a pressure on the company profit margins. The uncertainty still faced by most brands will lead them to be asking tough questions about their expenditures, with marketing of course being one of the largest.


With greater pressure to control costs, the CFO is paying a lot more attention to the company’s largest costs, especially those costs considered discretionary like advertising which often, in the CFO’s eyes, doesn't have a highly predictable heritage of success.


To put it bluntly, now that the era of cheap money is over, company boards are scrutinizing operating costs to protect their margins which puts added pressure on marketing to account for every dollar spent and show how the investment will be offset by future growth. This has led marketers to be a little more conservative when setting budgets for 2023. 

Why is quality so important now?


In 2023, marketers will have to argue for continued investment in their brands, knowing that their companies require every dollar they spend to work harder than ever. And that opens up two routes of thinking for the marketer:


Chase quantity - renegotiate everything to save money then re-invest that in more marketing to get more impressions and impacts for each dollar spent.


Chase quality - recalibrate towards doing fewer things but doing them better; work smarter, not harder; pay more if necessary, in order to secure better quality talent, creativity and media placement.


The temptation will be to chase quantity - getting more media impressions - by reducing standards and accepting poorer quality. That might look like a win for media but it's a loss for the brand because over time brand equity will drop. The quality of media has a huge influence on the quality of a brand, we have to remind ourselves in media that we are all in service of the brands we love. Media is more than a financial engineering exercise to squeeze out costs, it is how our brands behave in the world. It matters. Brands deserve better media. 

Education, instinct and influence are needed to succeed.


So, having said all of that, what is going to make a difference in 2023 and what skills might the marketer need to advocate for investment in quality to get the better media that their brands deserve?


  • An education in marketing to understand how brand communication works - a skillset that's not only helpful but really underrated. 

  • The ability to trust their marketing instincts and care for their brands, with confidence. This instinct must be augmented with data, rather than controlled by it.

  • The ability to influence; being a strong internal communicator when your company's finance team wants to cut advertising because they see it as a discretionary spend. Compelling words are needed to defend investments in brands and advocate for quality.


As a marketer, you have to trust your own judgement. You know not to look at price as the only indicator of success. You know that quality media might cost more and your teams will be looking for permission to raise CPMs and pay more premiums to secure the best media opportunities. You can be confident that better media drives better business and you are ready to defend this strategy because you know that brands deserve better media.


When brands flourish, we all win.





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