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Well, considering the results of some research analytics, it does seem that marketing in 2023 is indeed an uphill task mainly due to the following reasons:
economic downturn across the globe
inflation leading to reduced aggregate demand
political instability across various regions
increased competitive pressure during decreased economic growth
evolving consumer trends and the need to keep up with them
In the current economic climate, there has been a noticeable impact on company budgets due to global inflation and instability. As a result, marketers are faced with challenges in their efforts to attract and retain customers. There are even speculations of a global wave of recession occurring within the year; with economies like Japan at the tip of it.
What Do The Statistics Say About Marketing Challenges In 2023?
While Shakira may choose to change one of the words in the next phrase but for marketers, it is statistics that don't lie (I thought we might need a bit of humour as the numbers are a bit depressing). To analyse what the statistics say about marketing challenges in 2023, I did some research and found three of the reports to be quite insightful and summarised the findings.
According to research conducted by Momentive in their 2023 marketing report despite the current marketing challenges, the primary objective for most marketers in 2023 is to achieve growth, as evidenced by 62% of companies intending to prioritise market expansion. At the same time, 53% of marketers (out of a total of 500 respondents) say that their company is experiencing more competition now compared to last year (2022).
However, 41% of marketers anticipate that the challenge of slowing growth will arise in the upcoming year. Corporate leaders have placed brand growth to be of utmost importance to marketers, with 91% stating that it is critical to their company's success in 2023. The same report also shares feedback that 33% of the respondents say that these goals are to be managed within existing or reduced budgets!
Meanwhile, according to the State of Marketing Trends 2023 report by HubSpot, the ongoing economic concerns bear a direct impact on marketing budgets. Due to a general economic downturn coupled with reduced aggregate demand and changing consumer preference, strategic budget cuts are being anticipated in the following areas:
Paid social media content
Print ads
Physical ads
In-person events
Email marketing
To add to this, in the event of a recession, a significant percentage (24%) of marketers anticipate having to reduce their marketing budget. Meanwhile, an additional 20% expect to adjust their marketing goals, while 20% believe that they would have to reduce the scope of their activities. Almost one-fifth (19%) report that they would need to completely pivot their tactics.
Then there is another research conducted by Sapio that also hints at the worst enemy of marketing: recession. A survey conducted by Sapio Research gathered the opinions of 500 business decision-makers from companies with 25 to 10,000+ employees in the UK, Germany, Japan, and the US while collecting 2,000 opinions in total.
According to the data gathered by Sapio, while a wave of recession appears to be the top concern of businesses in the US, all the respondents agree with the looming threat of recession and its impact on business strategies across the board.
The report further suggests that uncertainty about future planning is the second-highest challenge for businesses right now. This, combined with reduced cash flows, the ability to find the right human resource, and a fall in employee productivity does not fare well for the external challenges faced by businesses in these trying times.
Based on these statistics, it appears that marketers need to achieve more with minimal budget and resources and yet reach performance goals. At the same time, they may need to find a middle ground between leadership expectations and the external challenges they face.
What Do People Say About Their Individual Marketing Challenges In 2023?
To hear the story directly from the horse’s mouth, I conducted a brief survey of my own by contacting marketing professionals. Here are the results of the survey and some personal insights shared by some of the respondents:
The first question was “According to you, what is the topmost challenge that marketers face in 2023?” As you can see from the chart below, everyone agreed that the topmost marketing challenge this year is the economic downturn faced by global economies.
However, the next question “Considering the current challenges, what do you think should be the marketing goal of brands in 2023?” received divided responses with diversification into more lucrative segments being the top choice.
When asked “Has your department/company/client implemented a brand/corporate strategy based on the current marketing challenges to gain a competitive edge?” the feedback was equally divided between Yes and Not Yet (which is always better than a No).
Finally, when asked about the initiatives that can help in overcoming the current marketing challenges, the choices in decreasing order of priority were as follows:
Pricing strategy in an economic downturn
Advertising strategy to increase audience mindshare
Consumer insight tools to assess evolving needs
Strategic partnerships for wider market access
First-mover advantage in a changing landscape
Elaborating on his views, Communications Manager, Faez Roger, said, “While economic downturn appears to be the greatest marketing challenge of 2023, I believe that diversifying into more lucrative segments holds great potential in business strategies.”
He further added that “In my opinion, the right advertising strategy that is aimed at increasing audience mindshare can prove to be the most rewarding marketing initiative in these challenging times. For this, businesses need the right tools to gauge consumer insights and assess evolving needs”.
Faez is based in Dubai, UAE and can be found on LinkedIn where he talks about culture, social media marketing, digital transformation and corporate communications.
When asked about his views, Siraj Iqbal Colombo, Head of Licensing Business MENCA (Middle East, Northern and Central Africa) at Electrolux Appliances shared “The strategic goal of marketers in 2023 should be the maintenance of their market share. This can be achieved through a focus on key brands, brand and product portfolio rationalisation.”
Adding to his opinion, Siraj said “The right pricing strategy with a keen eye on consumer insights are the two main initiatives that can help businesses overcome their current marketing challenges. For this, marketers would need to adopt a data-driven approach to drive star products to a brand premium level.”
Based on the opinions shared in this survey, there are two key takeaways:
Businesses that exhibit the most confidence and competitiveness in their operations will prioritise the advancement of their brand and supplement their endeavours with valuable insights.
Marketers with a high level of confidence possess the necessary data to comprehend and predict the requirements of their intended audience.
How Do You Market Successfully During An Economic Downturn?
There is an interesting read in the Harvard Business Review titled How to Market in a Downturn that answers this question to a great extent by referring to the recession of 2008 and 2001. The writers, John Quelch and Katherine E. Jocz talk about the different marketing approaches that are applicable to different consumer segments.
They’ve divided the generic consumer pool into four segments; based on their buying behaviour and consumer psychology. These are:
The slam-on-the-brakes segment. This segment feels the hardest hit and tends to reduce all types of spending.
Pained-but-patient consumers. This segment is the largest segment of all as it makes conscious efforts to economise in each area.
Comfortably well-off individuals. This segment consumes at near-prerecession levels but they tend to become selective in their purchases.
Live-for-today consumers. This segment is apparently not affected by an economic downturn and tends to carry on with its usual purchases. Their response may occasionally come as delays in making major purchases.
Then there is a categorisation of products that make it to the shopping list of these consumer segments. These include:
Essentials: items that are necessary for survival
Treats: indulgences that are considered justifiable
Postponables: products that may be desired but their purchase can be delayed
Expendables: all that is perceived as unnecessary
Based on the combination of the consumer and product segments, the advice for marketers is as follows:
Therefore, it appears that there might be light at the end of the tunnel for marketers even in times of a recession. For this, they may need to:
Streamline product portfolios
Improve affordability
Bolster consumer trust
Position for economic recovery
What Are Some Marketing Trends To Lookout For In 2023?
While businesses that are ahead in the race to beat the ongoing marketing challenges that cropped up during covid and seem to have had a ripple effect over the years appear to be following a similar grandma's recipe, there is a lot to be learnt for those who find themselves a little further away from the finish line.
Research suggests that the highest ROI generators are blogs (yay for me!), social media tools and influencers. Videos and their usage on social media stand out as the most effective media format.
Coming back to Sapio's report, partner co-marketing falls right behind social media marketing with traditional advertising falling down to fourth place.
If you are a marketer who is not benefitting from gaining access to consumers through technology, you may need to consider the following data set and reconsider your strategy for the coming months.
And here is the proof of the pudding. Despite losing its popularity to Instagram, Facebook continues to remain the most favoured social media platform for marketers mainly based on the ROI it generates for them.
Who Got Through The Marketing Challenges Of 2023?
While a lot of companies got through the marketing challenges of 2023 and many others have the right strategies in place, the common denominator for all of them remains using consumer insight to design evolving marketing strategies.
One particular ad campaign that seems to have shattered the glass ceiling is the Raise Your Arches campaign designed by Leo Burnett for McDonald’s.
Directed by acclaimed film director Edgar Wright, the campaign was rolled across TV, digital, in-store and social, with a Snapchat and Instagram lens.
The McDonald's #RaiseYourArches campaign is based on the concept that the invitation to visit McDonald's can be communicated without words. It features a group of office workers who conspire to go to McDonald's without speaking to each other.
The first teaser launched on Instagram with a clip of the “golden arches” and the eye emoji. It was then launched on social and TV and included a two-week promotion offering app users daily discounts to drive app downloads.
The campaign was supported by offline and online ads and offers to promote app downloads. It was also promoted on social media with Snapchat, Instagram and TikTok developing campaign-specific lenses.
Creators and influencers were encouraged to invite their followers to participate in the trend by tagging them in the caption, followed by the tagline “Fancy a McDonald's?”.
Despite the absence of McDonald's branding or food in the tongue-in-cheek ad, it has proven to be popular across social media with almost 5 million views on TikTok and 1,000 posts on Instagram.
It will be interesting to see the impact of this campaign on app downloads and the overall performance of McDonald's throughout 2023 as it is the number one downloaded fast food app in 2022.
If you haven’t seen the Fancy a McDonald's? #RaiseYourArches ad yet, you shouldn't miss it.
And if that made you hungry, all I can say is my friend is a fitness trainer and she would kill me if I didn’t say this but a salad is always better than a burger!
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