Home Strategy S4’s Sir Martin Sorrell: Brand Marketers, Your Budgets Are Gonna Get Cut During The Next Recession

S4’s Sir Martin Sorrell: Brand Marketers, Your Budgets Are Gonna Get Cut During The Next Recession

Businessman On Falling Down Chart. Business Concept Illustration.

If you’re a marketer who wants to hear a comforting bedtime story about how brand marketing will endure during the impending recession, you’re not going to get it from Sir Martin Sorrell.

The conventional thinking goes that if companies maintain their investment in brand marketing to stay top-of-mind, even when the going gets tough, they’ll be rewarded on the other side of a downturn.

“I’m sorry to deliver this message, but the reality is that is not going to be the case next year,” Sorrell said, speaking at Web Summit in Lisbon on Thursday.

Sir Downer

Sorrell, the former CEO of WPP and now executive chairman of S4 Capital, has been through more than one recession in his day, from the economic downturn in the early 1990s to the burst of the dotcom bubble in 2000 and the great recession in 2008.

Although these crises caused negative ripple effects, “in each of those cases, you could see a way out,” Sorrell said.

But this time around, there are three unique and confounding geopolitical factors as the backdrop to economic uncertainty: tensions between the US and China, the ongoing conflict in Ukraine and the uprising in Iran.

And these issues “are very difficult to solve,” Sorrell said.

“I don’t want to be defeatist about it, but I don’t see a Kissinger [type] or somebody like that about to try and negotiate,” he said.

Perform or go home

Meanwhile, the marketing department is going to get pressure from the CEO, the CFO and the procurement folks.


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Navigating through all of this disruption, combined with record inflation and ad-industry-related challenges like Apple’s privacy changes and Google’s plan to (eventually) phase out third-party cookies on Chrome, doesn’t put the C-suite in the mood to do anything that isn’t at least somewhat measurable.

“The net result,” Sorrell said, “is that there will be a move away from brand awareness to activation, performance, measurement and ROI.”

At another industry conference last week in Florida, ANA CEO Bob Liodice urged marketers to defend their investments when C-level executives question the marketing team’s priorities.

“You’re going to be asked to cut budgets. You’re going to be asked to find ways to save money,” Liodice said. “This is not the time to do that.”

Under review

But belt-tightening can also be an opportunity of sorts.

For example, there’s a surprising, or perhaps not so surprising, amount of fat that marketers can trim from their plans and partner list when the pressure is on. Shiny objects, beware. (We’re looking at you, metaverse.)

“You have to kill your hobbies,” said Tracy-Ann Lim, chief media officer at JPMorgan Chase, on stage at Web Summit. “The nice-to-haves are a distraction. Focus on what really matters and apply the lessons you learned from the pandemic.”

One example of a lesson learned is for marketers to always push for flexible contracts with vendors and partners to avoid getting stuck with untenable obligations if there’s some sort of unforeseen event, like a global pandemic.

“Get in the habit of putting agility into your deal terms,” Lim said.

That’s advice for life.

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