Rachel Reeves first Budget was historic for a number of reasons; nonetheleast because it marks the first Budget delivered by a female chancellor of the Exchequer. It also marks the first Labour budget in 15 years.  

For the marketing industry, the Bellwether Report chimed with the ominous sound of decreases in marketing budgets as marketing leaders paused marketing spend amid the negative budget hype in the run-up to today’s historic announcements.

The Q3 findings reveal that the respective net balance of UK companies revising their marketing budgets up (21.6%) vs revising them down (21.6%) has dropped from +15.9% in Q2 to 0.0%. This demonstrates a significant shift in behaviour from the robust growth observed over the previous 13 quarters, which had averaged an impressive net balance of +8.8%.

For marketers the proof points of continuing to invest in uncertain economic times are myriad. Yet the long and the short of it remains that pressure on margins is already placing creativity on pause in many parts of the industry. With this in mind, we asked industry leaders how smart brands can better play the long game and push past budget-anxiety-induced short-termism? 

Budgets come every year and they usually contain some uncomfortable financial truths. This one has gained more than its fair share of attention because Rachel Reeves has already said it will address “difficult” decisions. But businesses managing their brands are used to macro challenges – many of us will have managed brands and worked through recessions, austerity, cost of living crises, pandemics and more. It’s why we spend so much time and effort creating and building strong brands – because strong brands mean growth (a popular concept for the current government). It is by protecting and investing in brands that businesses become robust enough to weather the inevitable economic highs and lows. Only growth from strong brands will mitigate for the financial impact that the budget will have on businesses.

We know that while brands are built over years, business performance is often judged in quarters so it can be extremely tempting for brands to make short-term, snap decisions. However, our evidence is that consistent investment in effective advertising produces sustained brand and business growth, and short-term spending cuts put future growth at risk.

The IPA Effectiveness Databank consists of hundreds of examples of advertising and brand building best practice dating back over 40 years, and clearly shows that companies that increased their marketing budgets during tough times, created a competitive advantage that helped them report higher average profit and better market share growth when the economy recovered.

We would urge anyone thinking about cutting their marketing budgets to read the wealth of resources available through the IPA and to make the case for brand marketing. It will pay off in the long term.

The landscape for businesses may remain uncertain for a while longer as the impact of the chancellor’s budget becomes clear, and there’s a risk that nerves in the boardroom filter down into more cautious marketing.

But the focus for brands should always be on standing out – in a way that’s relevant and meaningful for consumers – rather than playing it safe.  It’s this sense of difference which allows businesses to justify prices, keep hold of customers, and position themselves for growth.  This is not the time for knee-jerk reactions like price promotions, which might drive short-term sales but ultimately chip away at brand equity and profitability in the long run.  Nor should marketers rip up everything they’ve done before.

What’s needed is consistent, effective creative, which continues to hammer home what makes a brand different and delivers bang for buck. Tools like AI-powered pre-testing of campaigns have made it easier and more affordable to assess ideas quickly and see what’s likely to chime with audiences. Prioritising good, commercially-led creativity is one of the most fiscally prudent things a marketer can do.

“We’ve run out of money... so it’s time to start thinking.” Are Ernest Rutherford’s famous words echoing around the Treasury? And will the same sentiments soon be the ruling mindset among creative industry leaders?

Straitened times can certainly sharpen minds and bring a renewed focus on the essentials. The problems start when what’s considered “essential” overlaps entirely with the short term and whatever’s urgent. How can we as creative industry leaders help our clients see that focusing on the essential doesn’t have to mean neglecting the strategic? There are five key distinctions that creatives need to consider:

1. Are we using our strategy muscles or are we letting them wither?
2. Is our client’s purpose - at least in theory - an enduring commitment, a vague incantation or a guide to action? And are we as leaders inspiring our clients with what delivering on their Purpose could mean?
3. Are we looking for consumer needs to match to our competencies? Or are we building competencies around consumer needs? The latter takes longer but drives enduring growth.
4. Is our brand a communications vessel, or is it a guidance system mapping how we’ll get from where we are to where we could be?
5. Are we drinking the 360 degrees, always-on Kool Aid? Or are we defining and delivering the essential moves to grow brand value?

As creative industry leaders, one of our key responsibilities is to remember that while it’s never tomorrow, tomorrow will always be coming.

The Government have publicly claimed to be both the party for ‘working people’ and the party for business. If nothing else, this Budget has proved that in Government, as in life (and marketing), you can’t be all things to all people. Labour has painted itself into a corner with its “working people” mantra. An audience they are repeatedly unable to define and their Budget has further proved that (raising Bus fares by 50% is a tax on working people no matter how they spin it).

But perhaps, hidden within this Budget are simple lessons that the best marketers already follow (and the Government hasn’t).

• Genuinely know and understand everything about your audience
• Be clear on your role within their lives
• Don’t think short term at the expense of the long term
• Be consistent in your communications and behaviour
• Tightening Budgets should mean continued (more) focus on creative thinking not less

Creativity should come to the fore in times like these. The best agencies and the best marketers know this. And maybe the Government’s Leadership should take a Marketing lesson from Binet and Field and read The Long and Short Of It. That just might serve them well.