Comment: GovUK urges brands to slash ad spend amid economic woes

slashing budgets - cost of living crisis - Image © Mark Johnson

The UK Government is once again weighing-in on the workings of the advertising sector, and is reportedly set to launch a campaign urging firms to slash their marketing and advertising budgets.

Behind the move is the growing cost of living crisis which has gripped many consumers and households in the UK.

But is the suggestion that big businesses cut back on advertising and marketing really an answer to the nation’s economic woes, or is it just likely to create even more hardship?

We’ve been asking the sector what it makes of the latest idea from the Government’s new business tzar… 

faye daffarn MD, TugFaye Daffarn, Managing Director UK, Tug 

“Now is not the time to cut marketing budgets, but I agree spend should be “refocused”. 

“Brands must be able to move budgets fluidly between the best-performing channels and measure everything to ensure they’re being as efficient as possible and can see where they can afford to pull back without affecting sales. 

“Businesses should also be led by demand and focus on showing consumers what they actually want to see: a prime example being sustainability. 

“Rather than slashing budgets, brands should channel them into promoting sustainable consumer choices and developing lower-carbon media plans. Moving forward, we hope to see businesses increase their use of digital advertising to bring added value to customers.”

Tony Ayaz - Scuba AnalyticsTony Ayaz, CEO, Scuba Analytics

“Calls for a reduction in marketing spend to relieve the pressure on consumers’ purses is encouraging businesses to take a short term view.  

“The road has not been smooth for brands; despite an initial post-pandemic resurgence in spend, the economic climate is now challenging once again. 

“Rather than a reactive approach to economic challenges, businesses should be considering the long term efficiency of their marketing spend. 

“Afterall how a CMO chooses to spend their marketing budget can guide an organisation’s long term direction, impacting on customer experience and influencing internal efforts such as culture.

“As such, marketers should be striving to deliver the best return on investment and should manage their advertising activity in real time. 

“By leveraging their data to create a continuous, 360 degree view of the customer, brands can produce targeted and effective campaigns. 

“A better understanding of consumer data will afford businesses the efficiency required to deliver what consumers really need.’

Suzy Ley, ZefrSuzy Ley, EMEA Marketing Lead, Zefr

“Brands that maintain presence throughout good times and bad are the ones that consumers will reward. 

“For marketing budgets, it’s about ensuring you’re maintaining spend where audiences are — which will be good for the platforms — while being cautious about spending in the long-tail.

“Transparency into where ad spend is going should be the focus for marketers at all times, but especially now.”

Harriet Durnford-Smith - AdverityHarriet Durnford-Smith, CMO, Adverity 

“In an era of economic uncertainty, it is understandable that businesses are looking at cutting costs. However, the answer isn’t just to cut marketing budgets, especially without any insights into how this will affect the businesses’ bottom line. 

“Cutting budgets, especially marketing, is not a silver bullet that will solve all your problems. Rather, efficiency is the name of the game – businesses can prepare best for a recession by making sure they are as efficient as possible with the money they have. 

“And that includes marketing budgets. 

“Sadly, marketing is often the first thing that gets cut and that is because too often it is seen as a nice to have rather than must have part of the business. 

“Again, this won’t change until marketers, and CMOs in particular, start being able to clearly demonstrate what the impact of a cutting marketing’s budget will be on revenue”.

(Note: This is a living article which may be updated later with additional comments)