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SetFocus: Revisiting your 2013 Marketing Playbook

 It is halfway into Q1 2013, as you do a reality check of your fiscal year AOP with marketplace conditions, here’s a little cheat sheet on what you need to know as a marketer in order to beat the plan.

The U.S. Economy in 2013…
General consensus among economists is that of weak to moderate growth in early 2013, and a stronger recovery coming in the later half from the Housing sector, but there are other headwinds at play that could have a dampening effect early in the year, including the debt ceiling debate (once again), expiring tax cuts and spending reductions (collectively known as the “fiscal cliff”). On Jan 23, the “No Budget, No Pay Act” temporarily suspending the Debt Ceiling until later in the year, but without congressional action this issue will resurge before year end if there is no budget adopted by Senate by then. The recurrence rate of this issue is taking a toll on consumer confidence and capital investment/job creation, as indicated by low readings of the Michigan Consumer Sentiment- this indicator, has been exceeding consensus expectations for the last couple of months – today’s reading at 76.3 is above expectation of 75, but still well below the low 80 readings going into 2012 year end.

On the positive side, there’s some indication including forecasts from The World Bank Commodity Price Forecast, of lower commodity prices in 2013, which can provide some tailwinds[1]. The DOE also predicts lower gas prices in 2013[2], which generally helps consumption by freeing up disposable income and driving shopping trips up.
The Employment report in February (for January) came in a bit below expectations at +157K, which is lower than the previous revised number of +196K- 2012 average growth was 181K/month.

What does this mean for your 2013 Marketing Strategy?

If economic uncertainty continues building up into mid-2013, then marketing strategy early in the year should emphasize your value proposition, focusing on share growth through Trade and Consumer promotion investment. Any relief in costs from favorable commodity pricing changes should be passed through 100% to consumers. Advertising focus, both online and off-line, should be on lower funnel that aims to increase conversions by “nudging” consumers sitting on the fence on your brands and retaining existing consumers that may be vulnerable to competitive promotional incursions. Paid Search is especially a good way to get in front of consumers one step before the purchase decision. Paid Search importance is going to be even greater in driving conversion with Product Listing Ads (Google Shopping’s new rich ads functionality[3]).

As the economic uncertainty abates towards mid-2013, focus should shift to longer-term brand building and differentiating your brands to reduce dependence on promotions through strong upper funnel advertising activity. Later in the year is also a good time for new product launches as consumers tend to be more open to trial under lesser economic uncertainty. This shift to shoring up brand equity should help position your portfolio for a strong finish to 2013and create a strong momentum into 2014.