Alex Connell, Group Planning Director – Carat Australia
The Australian economy (as measured by GDP) is forecasted to decline to 1.5% in 2023 from 3% in 2022.
Adding to this, inflation, further economic uncertainty, shifting regulations, supply chain issues, cost of living increases, measurement fragmentation, and marketer’s outlook becomes even bleaker.
This means marketers are faced with the challenge of overcoming some big barriers to growth this year for their brands. To outperform the economy, it is of course crucial for brands to identify where growth opportunities lie and plan accordingly.
Much has also been said of the industry’s obsession with short-terminism and need for CMO’s, marketing departments, and agencies to deliver immediate results as well as the distraction from new channels and tech but a return to basic fundamentals in growth planning for marketing communications are much more likely to sustainably deliver the targets clients will brief their agencies on in 2023.
Category dynamics
A good place as any to start is to examine the state of the brand’s category. Is the category experiencing growth or disruption? Are there untapped markets or emerging trends that the brand can capitalize on? Which similar or adjacent categories are buyers coming from? Where aren’t they coming from? Which similar or adjacent products outside the category are being bought and why?
For example, the majority of current SUV owners either won’t be in market for a new SUV this year or if they are they’re probably more likely to stay with the same nameplate than a competitor brand. Typically a large percentage of new SUV owners come from other car types such as hatchbacks so an SUV brand’s growth is probably more like to come from here than from existing SUV owners.
Brand deployment
Once the category has been assessed, it is important for brands to assess their own readiness to drive growth. Is the brand actually fit for purpose, with a strong value proposition and relevant positioning? Are all available touchpoints within the ecosystem leading to the most optimal actions in the consumer journey? Do they have the necessary resources and capabilities to capitalize on these newly identified growth opportunities?
Years ago Gucci famously repositioned to appeal to younger audiences because they realised they will be the largest future growth opportunity.
Gucci Highlighted its progressive and contemporary character, refreshed its logo, moved to an Instagram-heavy style of promotion.
Current and future audience demand
Byron Sharp’s laws of growth state brands grow by increasing their overall penetration (customer base) across all levels of purchase frequency especially lighter/passive.
For example, it may still be worth advertising dog food to people without dogs because they may become dog owners one day not getting existing dog owners to buy more dog food.
So taking a wider lens, who may not be the immediate buying audience but a future growth audience? And are they worth reaching now to create salience and future demand? Which audiences have influence over the buying behaviour of others and why?
Communications reach vs opportunity
Finally, how can communications drive growth?
If we’ve identified 18-24 are the key growth audience, is our media mix effectively optimised to reach the fair share of this audience relative to how big the opportunity audience is? Or do new channels and tactics need to be introduced to increase investment and reach and this audience? Or are we reaching too much of an audience with limited growth opportunity? Sounds simple but it’s also most effectively understood when looked at through the lens of category, brand and wider audience dynamics.
So if brands are to successfully take on some big barriers to growth this year, it’s worth reconsidering some basic fundamentals of marketing communications; examining the current state of the brand's category, assessing the brand's readiness to drive growth, and considering dynamics of current and potential future customers before considering new channels and tactics.
By taking these steps, marketers are more likely to identify growth opportunities to outperform the economy and achieve sustainable growth targets.
After all, it’s likely no one’s 2023 marketing plan has forecasted a 1.5% decline.