Author: Ishtiaque Hossain
From tackling enterprise class marketing problems, to augmenting next-gen digital marketing efforts at ADA, Stephanie Caunter has almost seen it all. And now, she shares her insights with Marketing In Asia on why she thinks the Southeast Asian marketer is poised to succeed in 2020 – as long as they play their cards right.
All economic indicators are forecasting an economic slowdown in the ASEAN region, largely due to the Trump Administration’s recent policy changes around the US-China Trade War. How are you so sure that the marketers in this reason are poised to succeed?
I’ll concede that the US-China Trade War has repercussions on the ASEAN economy, but despite this setback, I believe this region is going to come back strong. I’m speaking from experience, and armed with data. According to a recent report by Nikkei Asian Review, investor confidence in the SEA region is as strong as ever. Data on more than 35 funds hints at high investor confidence in the region’s startups. Even the marketer’s themselves are confident that 2020 has good things in store for them. Nearly half the respondents in our poll said that they expect their marketing efforts to be positively impacted by the 2020 economic landscape.
And even if we did not factor-in high levels of investor confidence in the region, I personally believe that a savvy marketer can use economic downturns to his or her advantage.
Can you share a few examples on how marketers would be able to turn a slowing economy to their advantage?
There are multiple ways, but the most obvious one would be to take advantage of the clutter-free advertising landscape. During times of economic downturn, marketing budget is usually the first to get axed. Most brands focus on performance marketing and metrics that are easily quantifiable, like lead generation and cost per acquisition. But if you’re keen enough, you can spot an opportunity in this crisis.
According to a recent study done by branding and advertising experts Les Binet and Peter Field, the effects of long-term brand building still outweigh the effects of any short-term activation when it comes to sales. It is a well known fact that at the end of the day, it’s our emotions that drive us to make purchases, not cold hard numbers on a dashboard. The ideal spend ratio between long-term brand building and short-term activation is still 60% ~ 40%.
Therefore, while everyone else is cutting spend on branding, a savvy marketer can take advantage of the clutter free advertising landscape to create a lasting impression in the minds of the consumers’, while building trust as well. I have included several case studies in our thought leadership report titled: 2020 Outlook for Southeast Asian Marketers: 4 Steps to Outmaneuver Your Competition.
Do you have any stats on which industries are going to be most impacted by the economic downturn?
Actually, we do! According to our survey, the industries which are most negatively impacted in terms of new customer growth in SEA are: financial services, telco and FMCG. However, these are also industries that stand to gain the most from brand building activities.
Because, while purchase of high-involvement products (like cars and real estate) is bound to take a dip, low-involvement products that are “seemingly expensive” don’t necessarily have to give discounts in order to maintain customer growth. Again, this is where brand building comes into play.
Can you elaborate on what you mean by “seemingly expensive”?
For example, in times of economic downturn, consumers still spend money on small indulgences, like artisan coffee, or premium lipstick. They may not have money for big-ticket luxury items, like a new car or real estate. But most consumers will find spare cash for small luxury items. This phenomenon is referred to as “the lipstick effect”. So industries which fall into this particular category are usually mostly impervious to the negative effects of a downturn. For marketers, instead of looking at price cuts and discounts, doubling down on brand building could prove to be a wiser option especially in industries like telco, FMCG and financial services.
I have discussed this phenomenon in further detail in our report, 2020 Outlook for Southeast Asian Marketers (Available for download). I hope you find it a useful read, and would love to hear your thoughts. Reach out for a chat anytime!
You can reach out to Stephanie on Twitter @StephCaunter.
Ishtiaque Hossain is the author of Wallowing in Dhaka, Deconstructing the Donald, The Medium Effect and The Quick & Dirty Guide to Fintech. He is a communications scholar currently working in the advertising industry.