Radical cost-cutting by companies, particularly in the technology sector, will potentially have a long-term impact on their branding and marketing. Fortunately, there is another way…
A recent Financial Times article revealed that the advertising agencies, particularly those working with tech companies, are seeing significant dips in profit and revenue. Cautious clients, complex economic conditions, and the volatile geopolitical landscape are listed as primary causes for this dip.
And, this coincides with cost-cutting measures being undertaken by the big tech firms, so it’s clear that their budget cuts are knocking on to the rest of the market, particularly agencies.
According to J.P. Morgan Research, technology giants lost $2.5 trillion in combined market value in 2022. In 2023, we have seen them pushing back against inflation, currency volatility, supply chain complexities and more. These companies are having to significantly cut costs as they rethink structure, branding, growth and business models.
The big names in tech are having to make sweeping changes, the big four reportedly ‘incurred more than $10 billion in charges across redundancies, real estate, and other cost-saving measures,’ as they undertake processes to save money and focus on top line growth.
However, when cost-cutting is done with intelligence it can be the route to resilience. Using data is a smart step in the right direction to facilitate growth.
Tech companies are no stranger to data and analytics, and they’ll be aware that sweeping cuts are unlikely to deliver growth and resilience. The Chief Procurement Officer (CPO) and Chief Marketing Officer (CMO) are having to refine their priorities in the face of the recession, leveraging their expertise to assess performance with a more critical eye – particularly the performance of budgets.
This does not mean unnecessary cost cutting or slicing into marketing budgets to inhibit marketing growth – it is, instead a shift in focus. A focus on maintaining investment into good marketing spend and reducing poor performing spend and wastage.
The only way to do this is with a detailed assessment and agency review. Using data to gain visibility into all areas of the business and work from a single source of truth that’s verifiable and relevant.
Enter marketing procurement data with strategic data-driven spending
We know from experience that for those companies paying attention to their marketing during a recession are likely to see higher sales after the economy recovered.
However, when companies are under pressure to meet stakeholder and investor expectations, the need to sharpen their pencils, and look to prove the value of their marketing expenditure.
To do this, CMOs need the support of their Procurement colleagues to provide valid and trusted data that offers proven metrics to assess every element of their investment and enables them to refine their cost-cutting strategies from a data-driven approach.
Companies can use data to streamline their marketing expenditure and agency costs, saving money while still holding onto the opportunities for growth and increased market share.. Data really is the key to unlocking the potential of any organisation’s marketing, as it puts hard facts at financial fingertips.
Marketing Procurement data to make informed decisions
RightSpend provides global brands with the data they require to save money while retaining their marketing visibility. Instead of cutting budgets, Marketing Procurement teams using RightSpend can optimise and refine their spend further, benefiting from circa 20% more.
Using the data to identify their areas of marketing spend that is no longer serving them and focusing on getting the best possible efficiencies from their marketing budgets. This allows for companies to capitalise on their marketing because they are getting more from their investments. RightSpend provides the opportunity to increase a $100 million budget to a $120 million budget.
We’re already helping some of the biggest tech companies transform their marketing spend. And, where many of the well-known tech companies lead, others follow.
If you’d like to discuss how RightSpend can ensure you focus your marketing spend effectively, rather than making drastic cuts to budgets, book a call today.