Marketing Leaders Must Take Immediate Action to Manage Risks Related to COVID-19 With a Strategic Cost Optimization Plan
CMOs and marketing leaders must take action to manage coronavirus-related risks by creating and implementing a cost optimization plan as soon as possible, and take into account the variable impacts the crisis will have on marketing budgets.
A recent Gartner poll among 833 business leaders revealed that 34% of businesses expect reduced levels of business operations due to COVID-19, 10% expect operations to be severely restricted, and 2% will cease business operations.
“Marketing organizations are ill-prepared for COVID-19’s impact on the global economy and consumer sentiment, and this crisis will only exacerbate the budget strain we saw developing in 2019 when marketing budgets began to decline,” said Ewan McIntyre, vice president analyst at Gartner for Marketers. “We expect COVID-19 will mark the inflection point in which marketing budgets begin to significantly decline. It is critical that marketing leaders take action now to help mitigate the inevitable risks to those budgets.”
“CMOs must make a concerted effort to alleviate the near-term and future impacts of the COVID-19 outbreak by formulating and implementing a marketing cost optimization plan,” Mr. McIntyre added.
Gartner recommends CMOs and marketing leaders take the following actions to better prepare their organizations for COVID-19 related risks to marketing budgets:
Assemble a Tiger Team and Establish a Plan
CMOs and marketing leaders should create a tiger team (a specialized, focused team) responsible for formulating, socializing and adapting a cost optimization strategy that flexes to the shifting demands and impacts that COVID-19 will place on global organizations as it continues to evolve. They must empower the tiger team to near-term, strategic decisions that position the organization for long-term success, and equip it with the data and analytics to review potential impacts on new costs associated with COVID-19 response.
Build Adaptable Scenarios and Conduct a Rapid Review
Respond to the impact COVID-19 is having on marketing budgets through swift and decisive action. CMOs must build adaptable budget scenarios and conduct rapid reviews of how the pandemic will likely impact their marketing functions in the near-term while keeping long-term marketing and enterprise goals top of mind. They should also appraise cost optimization objectives by conducting a rapid review of the tiger team based on those adaptable budget scenarios.
