Reducing spend on marketing to cut costs is a short-term solution

* 3 min read
As inflation is set to rise even further and forces outside our control are placing extra pressure on the cost of living, I was surprised to read that The Government is suggesting that brands and retailers should divert marketing spend into cost cutting instead. [1]

In actual fact it turned out to be a storm in a tea cup and The Government denies any such plans [2] but it got me thinking; advertising and marketing spend is often seen as an easy target and therefore ‘dispensable’ in tough times but in the long-run what damage would this cause to businesses, consumer trust and the economy and is there a better way to support businesses and help consumers?

It is undeniable that consumers are struggling with the unprecedented rise in the cost of living, but businesses are also struggling with supply-chain insecurity, catastrophic geopolitical events, skilled labour shortages and spiralling inflation. It’s simplistic to believe that reducing spend on marketing and advertising to cut costs will be anything other than a short-term solution. History has shown that only strong brands survive periods of uncertainty and upheaval and many Big Brands like PepsiCo and Unilever have pledged to continue investing in their marketing to amplify their brand values in the face of inflation. Similarly, amid supply-chain chaos and inflationary pressures, Procter & Gamble’s chief brand officer Marc Pritchard implored marketers to “double down” on their “core job” of using creativity to drive brand and business growth amid inflation and the rising cost of living.[3] 

Faced with trying to make ends meet, consumers will be looking at alternatives like own-label and value brands as well as comparing prices across different retailers and platforms. Consumers will have to make difficult decisions based on value for money and affordability as well as on convenience, availability and sustainability.

"As the pressure to support lower prices increases, the savviest businesses will be looking at a value strategy across their entire business ecosystem." - Kevin McAulay 

To help our clients do just this, Sun Strategy has developed a suite of technology solutions designed to manage cost and risk as well as future technical and sustainability packaging requirements for brands and retailers. e-halo is transforming packaging management globally by providing real-time data across all SKUs in every market and our game-changing digital artwork solution, e-volve produces fully print-ready artwork across all SKUs and formats inclusive of all local marketing and legislative demands saving clients 60-80% on existing artwork costs and maximising the strategic value of their packaging. 

[1] Marketing Week 30/06/2022

[2] The Drum 11/07/2022

[3] Marketing Week 19/10/2021


Whilst it’s a relief that The Government isn’t trying to interfere with Big Brand marketing strategy, it does bring into sharp focus the need for businesses to take stock of their value strategy to understand how they can help shield their margins and support consumers in these difficult times.

About the author

imageedit 1 6168940299Kevin McAulay - Packaging Evolution Champion

Kevin has over 20 years packaging experience in managing print and graphics for a number of FMCG and retail companies. Kevin has experience working onsite at a number of clients sits including Nestle and Unilever and managing remote teams, with a great understanding of stakeholder engagement across multi disciplines.

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