By Pamela Adongo, CMO, Next Media
Economic Slowdown, also known as Business Slowdown, is a state where an economy experiences little or even no growth, and is primarily attributed to decline in economic activity that occurs after the peak. In our case before COVID-19, things were “muzuri”, but since then, we have seen a decline in the rate of growth.
This happens because people and businesses lose confidence in the growth of the economy, forcing them to hold off spending, economic activity, and investment decisions. In the business world, economic slowdown is a period when there is less business activity than usual in the company. We all are currently experiencing this.
We have gone back to the drawing board as a family, friends that live together or individuals to reexamine our expenditures and prioritize household demands, because fuel prices are through the roof, the popular purple Uganda shilling note can no longer give you a day’s meal and the landlord lives on another planet (Probably, Neptune, where these challenges are mere tittle-tattle and so he/she just wants his/her money). Yet the year is three-quarter-way and salary increment discussions are taboo. Even the boda boda rider doesn’t “wanna” know. I can't help but bow for “team tusimbudde” who are still spending exorbitantly in boutiques, bars, eat-outs and supermarkets the same way as they did in 2016.
Anyway, the decrease in demand of goods and services in turn leads to decrease in production as companies reduce on output to match falling demand. And we find ourselves right in the middle of this mix.
As you may be aware, the number of adverts has dropped significantly in spite of increasing audience numbers (From 21m active media users in 2019 up to 24m active media users in 2022, IPSOS, NAMS: 2022). Under normal economic conditions, the media industry in particular would-be minting money.
The big dreams of three years ago, that were so close they were almost palpable, now seem to be receding further away. What we need right now is to reckon with resilience. We need to make sure that we make it through this tunnel to the bright light at the end. And there surely is a bright light at the end. Every expert at every level has told us that we shall find that light if we persevere. But that is another discussion.
So, back to my agenda: Is eliminating the cost of marketing communication budgets the very best option in an economic slowdown such as this? First let us go back to the basics. What is marketing communication and why do businesses need marketing communication?
Marketing communication is the means by which businesses attempt to inform, persuade, and remind their customers directly and indirectly of their products, services, and/or ideas, (Kotler and Kevin. L. K, 2010:34). Marketing communication is one of the core functions of any business, big, medium, or small, because it helps move products, services, and ideas from manufacturers to end-users and also builds and maintains relationships with customers, prospects, and other important stakeholders of the business.
Communication is vital to marketing because it brings everyone to the same page which, in turn, improves brand perception, brand affinity, and increases customer retention. How efficiently and effectively we handle our marketing communication, impacts greatly on our overall growth and profitability. With this understanding, why then would we consider cutting or eliminating marketing communication budgets? How will we achieve growth and profitability? How will we invest in brand equity and affinity? Is this not self-defeating? Because who will know what your business is about or up to?
The current state of the economy, married with evolving technological innovation has not only exaggerated information overflow but has also made it extremely accessible and continues to nurture individual consumption of information anytime, anywhere, through the mobile phone. This, therefore, means that to be heard or seen, to be considered during the purchase decision window and eventually picked among the clutter, you must be disruptive, innovative, and able to give real value for money, to give quality products and services.
To pull this off, you need money. But needing money doesn’t mean breaking the bank. It simply means being reasonable and spending only on things that will bring immediate return in some instances and long-term returns in others.
For small and medium organizations, digital marketing communication solutions might just be your raft amidst the storm. Through social media, SMS platforms (27.67m mobile phone subscriptions) and a well-crafted website (13.9m internet subscribers with 6.3% active on social media daily), you can achieve growth by focusing on what makes you different from competition, looking after your existing customers to nurture repeat purchase, optimizing your marketing plan, and watching and adapting to change in your customer behaviors.
The consideration to use authentic digital agencies like Next Com is critical to your growth and profitability because this is a point in time where you need value for money to the utmost, because engaging individuals may seem cheaper but taking a closer look can only demonstrate that it is expensive in the long run. As the saying goes, shortcuts are dangerous.
For big businesses, this is the time to increase your advertising budgets to remain relevant to your customers and prospects. You will reap once the economy recovers.
Here is why: as I mentioned earlier, the number of advertisers has decreased, yet the number of audiences has gone up by 18%, meaning that you have a higher bargaining power and, using the same amount of money, you will reach more people with higher frequency. Target cost-effective media spaces and relevant media such as television, internet, and outdoor which have, according to IPSOS: NAMS 2022, grown by 20%, 27% and 58% respectively.
Uganda has 24m active media users which is about 50% of the population, giving advertisers with effective media strategies a higher opportunity to grab an excellent Top of Mind growth opportunity.
You need to realize that five out of every ten Ugandans are actively consuming media daily.
We have 27.67m mobile subscribers and 13.9m internet subscribers with 9.7m smartphones, therefore exercising flexibility would take you a long way. If you do your math very well and you will achieve growth.
For example, if you have 10M, instead of insisting on other media, you can reach out to Next Com for an effective media strategy that will earn you real value for money. Eliminating marketing communication budget during economic slowdown is a befitting idea that will only slow your business down or lead to the closure of your business.