Covid-19: The Brand Managers Dilemma

It is 8:30 in the morning, you have just woken up or maybe you have already been up exploring the latest fitness trends. Either way, you receive an email from your boss. The request, budget exercise. As a brand manager, you have seen this before. The leadership group meets on Monday and the next morning you are asked to come up with a few budget cut scenarios by the end of the day. Normally, the reason can be a multitude of things; Sales are slow in your group, maybe its just a fire drill or there is a new investment opportunity approaching. Traditionally, your not overly concerned that your budget will actually be cut. You propose a scenario that you planned for, which cuts items that you never intended to spend agianst anyway. However, now it feels different. Your costs are already down, due to travel restrictions, but new consumer behaviors are becoming more established and your company needs to adjust. As you begin to think about items you did not plan to cut, you think about a few key things. What has changed since March? How do consumers find your product and has it changed? How do your consumer buy your product and has this changed as well?  

Brand mangers are faced with these questions and scenarios every day since the pandemic has disrupted our normal life. Cutting budgets around key areas of your business is never easy. What I have found in my experience and with consulting my network of fellow marketers, is that cuts happen at the top of the funnel and then work their way down. For brands that are sold through online marketplaces, this means pulling back on search and social media and focuses closer to the point of purchase through Amazon. For service based companies, this means focusing less on social, podcast and outbound sales and more on search and client services. There are various implications to this shift, but this adjustment makes sense. It is every marketers dream to serve an ad as close to purchase as possible. It also happens to be the easiest ROI to prove. This is the justification most firms will take. In addition to focusing on easy ROI channels, larger firms are navigating a tense social environment in the US and budget cuts can be a useful tool in taking a stance. The recent boycott of Facebook is an example of a convenient stance to solve an inconvenient budget problem. Overall, as a brand manger, it is key to understand what is most critical to driving your success. These times offer opportunities to level set you budgets and focus on the one to two critical channels that matter.