Hard on the heels of a looming recession, so far, the global financial and economic crisis has spurred slower job growths, bankruptcies, cost cutting, hiring freezes, and mass layoffs.
The consideration, that not all businesses are recession-proof (amidst the turbulence of recent job cuts), and to thrive during harsh economic conditions, companies tend to make hard boardroom decisions.
Meanwhile, when it comes to who suffers as a result of these boardroom decisions, it has been averred that, the marketing department is usually the budget cutting lever that can be pulled at any time.
“The hard truth is, If budgets get cut by companies, marketing departments are the first to go. Why? Because they’re the least necessary department in the whole company,” Jaxon Lindsey, Assistant Superintendent at Lakewood Country Club Rockville said in a submission.
“Prior to marketing departments existing, ad firms would take on major commercial creative work, and sales representatives would take on grassroots marketing initiatives. There didn’t need to be a vice president of marketing, or marketing coordinators. With how simple technology has made marketing, there’s even less of a need. Yet, marketing departments still exist. Why? To increase the value of a company, in turn, creating more revenue from shares. Why do you think all of these start-ups have positions like a “Vice President of Culture.” I mean, it’s a great sign that the economy is doing well, but I’ve never seen a more BS job title. It all started with the Marketing Department.”
But, how true is this assertion, and what department truly bears the brunt of cost cutting?
“This is an interesting perspective actually,” said Ladi Ogunseye, President, Digital Media Practitioners of Nigeria (DMPN).
“Any company cutting off its marketing department because of budget costs, initially didn’t know why it had a marketing department. The marketing function is to drive value for the business and value is in money. So if you cut out the marketing department in a company, who drives or manages the money making for the business? Sales department? Finance Department? HR department? Definitely not, and businesses that have done this have always made note of how it was a terrible thing to do in the very first place.”
“It is all about perspective,” marketing technology expert, Lanre Basamta pointed, Validating Ogunseye’s premise.
“To start with, marketing is many things. In some organisations, marketing is even the company, e.g Coca-Cola Nigeria is a marketing company; and Coca-Cola is clearly different from the Nigerian Bottling company. But let’s stick with Coca-Cola Nigeria. If they want to cut costs, will they close the marketing team which is actually the business team of the organisation? The second scenario, marketing is also growth and sustainability for some companies, e.g Jumia, FMCG and consumer brand companies. Marketing is the lifeblood of those companies. So, cutting costs by shutting down those teams is not foreseeable.”
“However, truly, many organisations position marketing as a support function which simply makes them a cost centre. The company runs their business and marketing provides support by spending money. So when they want to cut costs, of course they go to cost centres like HR, admin, Finance, marketing to cut down costs,” he explained.
Brand, Product & Adtech Consultant, Ademola Adekunbi points out that besides the hiring budget, the ad budget is usually cut first, “and stats have shown (studies from Mark Ritson, Byron Sharp and the Ehrenberg Bass Institute) that, that is the wrong way to go about it, whether or not you are the category/market leader.”
He shared: “It’s true that companies cut Marketing budgets first, but that’s because they don’t know better. Besides the hiring budget, the ad budget is usually cut first. It’s even the worst move if you’re a smaller competitor. Long-term brand activations will always pay off so the recession is not a good reason to cut Marketing spend, but I digress. To the point of company VPs, it depends on the structure and market size. Are they mid-market, startup, enterprise…etc.? How large is their organisation? To be candid, it would be wrong to say that a 2000-employee company with a 250-size marketing team, doesn’t need a VP. Much less, a 10,000-man company.”
On his part, Digital ad expert, Bukayo Ewuoso thinks Lindsey’s submission is probably the most dishonest comment about letting marketing go.
“The reason marketing is usually easier to cut is because most times, there isn’t usually a direct attribution to the effort and bottom line (revenue). It’s usually an indirect influence on the business. So when the business is trying to survive in the short term at times, they cut the marketing budget. Marketing professionals that are good enough are able to tell exactly how their efforts tie into the bottom line (revenue) and make a case for no cut.”
Marketing communications consultant, Fridel Makun notes that although marketing literally drives some businesses, for others, “marketing is just basically broadcasting or reporting while other departments do the work. it varies from industry to industry, e.g I believe you’d need marketing to sell a new bottle of juice, than you would need it to sell a new house.”
Digital strategist, Peter Adesanya buttressed that marketing should not even be an area where businesses should consider cutting costs. According to Adesanya, companies should focus more on filling their marketing departments with people trained to identify and leverage data and insights