Commentary

IAB UK Is Right -- Digital Marketing Is Well Placed To Survive Brexit Jitters

Two weeks on from the referendum, we can safely say the vote to leave the EU was always going to lead to what we currently see. The pound is at its lowest value in three decades, markets in the UK, and the EU -- particularly Germany -- have seen heavy losses, and both UK consumer and business confidence are dipping. While nobody can be sure what the outcome of trade negotiations with the EU and other nations will be, the market turmoil we are currently seeing was widely anticipated because it was glaringly obvious.

Amidst all the doom and gloom, I concur completely with the IAB UK conclusion that digital marketing is better placed to resist budget cuts brought about by brands reacting to lower consumer confidence by deciding to do less until the dust settles. The IAB UK had kept quiet for nearly two weeks following the referendum result to weigh up its thoughts. Surprisingly, it says very few people had put calls through to see what it believed Brexit means for digital marketing.

Now that it has decided to break its silence, it has a very clear path. Digital marketing is highly measurable and so can easily answer the board's questions of what the organisation will get back for every pound or euro put in to each channel. These are business metrics. They talk the language of input and output. Invest x into each digital channel and you get X + ? back.

As the IAB UK hints, this is not the case for traditional channels that rely far more on the metrics of old. Share of voice, propensity to buy, recall and so on are the metrics of marketing, not business. They are important metrics -- nobody would suggest otherwise -- but when budgets are under pressure from on high, it's best to be able to speak in concrete ROI terms than it is loose ideas of more people knowing that the brand exists. This is emphasised when consumer spending is down and propensity to buy count for far less than a proven positive influence on sales or brochure downloads, whatever metric the business deems important.

So amidst all the doom and gloom we have been reading for the past two weeks, it's worth taking on board the IAB UK's central points that we've been here before, in 2008 and the years of recession that accompanied the global financial crash, and digital went on to prosper. 

There are likely to be cuts coming, but these are most likely to impact the likes of out-of-favour print and the expensive thrills of a television campaign, maybe cinema and outdoor will see a negative impact too. But digital marketing is the best placed to survive the cuts. Just make sure you have your ROI arguments to hand, and can back them up, and digital will likely come through the next couple of years or turmoil relatively unscathed. It's going to be an interesting ride but digital marketers are definitely riding on the favourite horse.

1 comment about "IAB UK Is Right -- Digital Marketing Is Well Placed To Survive Brexit Jitters".
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  1. Lindsey Clay from Thinkbox, July 18, 2016 at 8:53 a.m.

    Hello Sean,
     
    You say online is the favourite horse, but this misses the point that it is often the cart. 
     
    For example, GroupM’s recent study of advertising response found that 33% of media-driven sales via paid for search are driven by TV advertising, as are 33% of media-driven brand interactions on Facebook and 26% of media-driven sales via online display. These effects are often hidden and are hard to unpick.
     
    It isn’t just TV. Other offline media also make a significant impact online. They are responsible for 13% of media-driven sales via search, 19% of brand interactions on Facebook, 10% of sales via online display and so on. 
     
    The countability of online marketing is very useful, but it is not a proxy for effectiveness. If you look at the evidence of what happens in an economic downturn, a focus on short-term, quickly counted effects has serious potential to damage brands in the long-term. 
     
    When Data2Decisions looked at the effects of cutting advertising during the last economic downturn they found that the revenue loss from taking one year off TV can take up to five years to recover from.
     
    This is the moment for marketers to master the wealth of effectiveness evidence out there and make the right integrated decisions for the long-term, not take a narrow view. It is time for ‘and’, not ‘or’.
     
    I appreciate that advising advertisers to keep sight of the long-term when their businesses are under short-term pressure is a big ask, but it is the right thing to do. At a time when Europe is on the brink of dis-integration, marketing should not do the same.
     

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