Marketing Briefing: The outlook for Q2 is mixed, but marketers’ hopes grow for a better 2nd half

By Kristina Monllos

If you ask marketers and agency executives what the second quarter will look like, you’ll hear that it’s a bit of a mixed bag.

Marketers are spending, and there are signals that spending could pick up in the second half of the year with more new business pitches happening now, according to agency execs. But there’s still a “cautious optimism,” as one agency exec put it when asked to sum up marketers’ current mood. At the same time, spending is down compared to the second quarter of last year — agency execs say that it’s down roughly 10%, a smaller percentage than many had expected earlier in the year — and marketers are holding onto dollars longer and seeking more flexibility rather than longer-term commitments.

“Everyone is hoping the spring is really the spring,” said Brandon Rhoten, CMO of visitation data platform GroundTruth. “There are signs that it might be a soft landing. People are hoping for spring, they’re hoping we can get back to business and not worry so much about inflation or a recession. There’s more hope than a month ago, certainly.”

That hope is tentative, per Rhoten, who said marketers are hedging their bets and spending on more performance marketing rather than brand building efforts. While marketers are cautiously optimistic for a better second quarter than they anticipated a month ago, the focus continues to be on flexibility, as marketers are hoping for the best but making sure their plans won’t set them up for the worst.

Marketers’ current focus is on short-term planning, spending closer to campaign launches rather than inking long term deals, explained Stacey Stewart, U.S. Chief Marketplace Officer at UM, who added that “flexibility continues to be top of mind.”

“Everyone’s primary concern is not in the spending itself but in the unknown,” said Stewart. “Everyone wants to hold onto their dollars until they’re confident that they’re not going to need to return those dollars to someone’s bottomline.”

Even as some marketers are staying cautious, others have a “keep calm and carry on” mentality and are continuing to spend and accepting lower profits for higher revenues, according to Jason Harris, CEO of Mekanism.

“More brands are recognizing that by not spending and competitors spending they could gain share of voice when economy picks back up,” said Harris. “The playbook of stopping spending [during a downturn has been] debunked. Smarter brands will take less profit to be in a better position.”

Harris noted that while there’s a focus on flexibility with ad spending, that flexibility push also seems to be trickling into new business pitching.

“The new thing we’re seeing is that clients want to do a project first and then if it goes well then it’s an [agency-of-record],” said Harris. “It used to be an AOR or project. Now we’re seeing this crawl before you walk situation, let’s get rid of AOR and do the pitch for the project. If we like who wins then it’ll convert to AOR.”

Even with this shift …read more

Source:: Digiday