Reporter: "What's your prediction for the fight?
Clubber Lang: “Prediction?”
Reporter: “Yes, prediction.”
Clubber Lang [penetrating stare directly into camera]: “Pain."
There is one thing about 2024 that I can predict confidently: There will be a great deal of uncertainty, and unpredictable things will happen.
We begin this year with a lot of serious issues and questions:
- Will the Fed be able to stick an economic soft landing, or are lingering recession fears prudent?
- When will the Fed start cutting interest rates, and how many cuts will there be?
- Will inflation flare up again?
- Will the various regional conflicts and wars grow?
- Are energy disruptions and global shipping at risk due to ongoing conflicts?
- How shaky are commercial real estate and the banking sector?
- What will be the fallout of an unprecedented and highly divisive election year?
- How much will monetary policy be influenced by politics during a historic election year?
- Are consumers tapped out due to higher costs and wages that aren’t keeping pace?
When you consider these macro-level concerns in the context of brand health and marketing, you must pay special attention to the historic Presidential election year. Here is a prediction that I can make with confidence:
In this highly contested election year, where powerful and deep-pocketed participants believe that they have a lot at stake, the cost of advertising will go up. Politicians and political action committees will spend big on TV and digital. Expect ad rates to go up with increased demand for spots.
Likewise, if interest rates go down, expect inflation in advertising costs. Many advertisers have suffered a reduced budget due to the high cost of capital. Lower interest rates make it cheaper for corporations to spend.
In a year of increasing advertising costs, marketing decisions will draw more scrutiny as the need to achieve bang-for-the-buck becomes more pressing.
All these pressures will require sharper financial analysis of marketing spend. In many cases, the Finance function will scrutinize marketing spend more closely in 2024. This is in line with the long-term trend of Finance focusing more on brand, brand equity and brand performance. At Analytic Partners, we have noticed a distinct uptick in the engagement of Finance professionals in analytics and our Commercial Intelligence platform. Leading companies are recognizing that Brand health and Brand building are key to the core performance of a business. Brand management is job one. We expect the trend of Finance engaging on Brand equity and ROI to continue and accelerate.
These are three themes to help you navigate through what may become a tumultuous year:
- Partner with Finance early to align objectives and set expectations. It should be all hands on deck to assure that your company’s core value proposition, your brand, gets the attention it deserves. It is far better to have Finance aligned and contributing to brand strategy before any disruption happens as opposed to fighting for budget after a disruption.
- When unpredictable things happen, there is a natural instinct to go into self-preservation mode. You do not want to be forced into instinctive, fight-or-flight responses. Instinctive responses are, by their nature, short-term thinking. Do not over-index on short-term reactions at the expense of the long-term value of your brand. So, how do you avoid being reactive? By planning…
- Scenario plan and have playbooks in your back pocket for multiple situations. It’s an election year with several hot wars going on around the world. There is a great deal of economic uncertainty. You do not want to get bogged down planning for every circumstance, but you can use scenario planning to plan contingencies for various potential vectors.
It’s usually a fun exercise to predict the future at the start of every year. Predicting what may come in 2024 is all the more challenging due to all the confounding variables that will come into play this year. I am jealous of Clubber Lang, above, as his singular prediction of “pain” for Rocky is easy given the variables are limited to: (1) a static, confined, boxing ring; (2) standard boxing rules; (3) Clubber’s fists; and (4) Rocky’s face. Pain is a safe prediction. When variables get as complex as the landscape of 2024, predicting results is risky. Therefore, if there’s one thing I can predict with confidence, it’s that 2024 is uncertain and unpredictable. That doesn’t make planning impossible, just more challenging. Leverage analytics and prepare to be agile.