A new international study by Rakuten Marketing of the luxury fashion, mainstream fashion, retail, travel and finance industries finds that despite the backdrop of Brexit, 53% of marketers across Europe have made expanding into new markets their top priority for 2020.
Commissioned among 610 brand marketers in the UK, France and Germany, the study finds 74% of marketing budgets are set to increase amidst economic uncertainty. For mid-size brands (between 101-500 employees) in the UK, this reflects an average budget increase of £275,000.
Driving this investment, 41% of marketers surveyed said tougher competition from online retail giants poses the greatest threat to their work in 2020. In the UK, this is felt most acutely by the marketers in mainstream fashion, of whom 57% are feeling this particular pressure point.
Anthony Capano, Managing Director of International at Rakuten Marketing said, “Marketers clearly see 2020 as a vital year to find solid international footing amid the rise of the digitally native retailers have rocked the UK high street. It’s positive to see that brands are looking to take advantage of globalised shopping habits that have emerged in recent years and establish their business in new and lucrative markets. Focusing on how they are going to reach these new markets, as well as reduce marketing spend wastage, will be key for those looking to expand internationally and continue to boost revenue.”
Wastage driving smarter investment
In the UK, marketers report 30% of their marketing budget is still wasted on the wrong channels or strategies – representing a 10% rise since the start of 2018. In particular, travel marketers express the highest level of known ad wastage (36%), whereas mainstream fashion marketers report just 23%.
With more traditional channels such as email marketing (31%) identified as chief drivers of wasted ad spend, 45% of the survey’s respondents said innovation in marketing would be a key challenge they tackle in 2020, alongside sourcing new customers. As such, marketers are focused on investing fresh budget into channels such as affiliate marketing and social media advertising (both 40%), reflecting the drive to work with the best partners capable of identifying relevant and valuable customers.
Capano explains, “Simply investing more money in marketing will not grow a brand globally. The mistake is to assume existing audiences are representative of other markets, whereas the truth is brands must be more open minded. This is the value of the affiliate network; the ability to pair the product with shoppers – wherever they are in the world – based on proven interest.”
A good year for marketing?
While the year ahead presents marketers with some tough decisions, 84% of UK marketers are feeling optimistic about marketing in 2020, rising to 88% in France and 89% in Germany.
All businesses irrespective of industry are focused on upping return-on-investment and marketing efforts are no different. More than half (52%) of UK marketers express that giving marketing a bigger voice at board level is a key marketing focus over the next year, making this goal more popular than driving efficiencies in spend (41%). In order for this to happen, having the means to boost and then prove ROI will be more important than ever.