Referendum repercussions are still shaking up UK life and industry across the board. Evidence for this – as if any more were needed – came earlier this week with the publication of the Bellwether Report, the quarterly gaze into the crystal ball on behalf of the country’s marketing sector.
Unsurprisingly, the report makes difficult reading. Prior to the referendum it had forecast marketing budget growth of around 3.3 per cent and 2.7 per cent for 2016 and 2017 respectively. Now this has been revised down to 0.2 per cent for 2016 and -1.3 per cent for 2017.
A plus for content marketing?
By and large, it’s big advertising agencies who have most to fear from any cuts. This is for the simple reason that they have the biggest budgets. In previous recessions, agencies have reacted to budget cuts by cutting staff. But, when the recovery comes, these numbers rarely return. In the 1970s, London’s advertising sector and related suppliers employed around 25,000. By the early 2000s, that figure was down to the low 7,000s.
Simply put, recessions have prompted the marketing sector to learn new tricks or perform the same tasks with fewer people. The question is whether the agencies will go for job cuts this time or try new things. It seems the latter could be on the cards, with talk of a more “performance-driven approach”.
One indication of this came from Johnny Hornby, founder of ad agency The&Partnership. He said: “Whereas 15 years ago you’d be saying ‘are we going to spend big on TV’ if you were a traditional big FMCG marketer, now I think we’ll be saying as an industry ‘why don’t we see what opportunities there are [elsewhere] – let’s develop content marketing strategies [our italics] with strong analytics and if we’re putting money into Instagram, for example, and [if] that’s delivering the returns we want, then let’s put more in.”
If advertising agencies do push into content marketing, it could produce two effects. Firstly, it means they would be selling content marketing to more clients. Secondly, it could encourage consolidation among existing content marketing agencies.
Ad agencies and content
There has been talk about ad agencies pushing into content marketing before. WPP has invested a fair amount of resource in gaining a foothold. The issue now, as previously, is whether agencies use copywriters for content marketing or journalists. If the former, don’t expect much. At the same time, don’t write off the possibility of them pulling content marketing into their core offering. Just look at how they’ve grabbed hold of digital marketing over the past 10 years.
Bad news can sometimes lead to innovative solutions. If there have to be cuts, then there are plenty of ways to make what money there is go further. In doing so, it could change the way the marketing sector prioritises different strategies. If this means a move away from big budget brand ads, then that can only be a good thing.
Could post-Brexit cuts to marketing budgets boost content marketing? is part of Content24, the blog for London content marketing agency FirstWord.