The current COVID-19 crisis has upended CMO priorities and budgets, leaving many scrambling for alternate revenue sources and all asking, “What in the world do I plan for now?”
To develop guidance in response to this question, Forrester forecasted how CMOs would spend over the next two years on media and advertising, marketing technology, marketing services, and internal marketing headcount. See our full report, “The 2020 COVID-19 Crisis Will Stun US Marketing,” for the detailed outlook. Here are the headlines:
- We used two scenarios to guide our forecasts. In all scenarios, marketing spend declines. But a return to marketing budget growth is much faster if the pandemic stalls by the end of 2020. Our second scenario — which we see as the more probable one — anticipates a mid-2021 recovery and will cause deeper budget cuts with broader effects across the marketing ecosystem and broader economy.
- In both scenarios, offline media declines. CMOs are moving money away from out-of-home placements that commuters and business travelers aren’t seeing right now and into brand-focused digital spots that allow for flexibility to adjust channel or message. For instance, the CDC is releasing location-specific virus announcements through digital billboards, retail kiosks, and truck displays as guidance changes.
- Marketing technology will sustain. Automation will support critical tasks, such as vetting specific households that are ripe for specific messages, measuring marketing effectiveness market by market, and delivering critical communications about revised open hours or health protocols. In some cases, technology may offer greater efficiency than relying on manual effort.
- Don’t stop marketing. Definitely revise pre-crisis products, placements, or prices in order to create the value customers need now. But study after study shows that going dark with marketing altogether hurts your chances of recovering well out of an economic downturn. When McGraw-Hill Research studied the 1981 and ’82 recession, it found that companies that marketed aggressively had 256% higher sales than those that did not.
How does this guidance resonate with your own outlook? Be sure to download the model behind our forecast to inform your own projections.