Immediate Actions for CMOs Amid COVID-19-Related Budget Cuts

As the coronavirus outbreak continues to spread and create further uncertainty, it’s imperative that chief marketing officers (CMOs) and marketing leaders take immediate action to manage coronavirus-related risks and implement a cost optimization plan. This plan must take into account the variable impacts the COVID-19 crisis will have on marketing budgets. In fact, 65% of CMOs and marketing leaders report they are already bracing for moderate to significant budget cuts due to coronavirus-related disruption.

“Marketing organizations are ill-prepared for COVID-19’s impact on the global economy and consumer sentiment, and this crisis will only exacerbate the budget strain we saw developing in 2019,” says Ewan McIntyre, Vice President Analyst, Gartner for Marketers. “We expect COVID-19 will mark the inflection point in which marketing budgets begin to significantly decline. It is critical that marketing leaders take action now to help mitigate the inevitable risks to those budgets.”

CMOs and marketing leaders should create a tiger team (a specialized, focused team) responsible for formulating, socializing and adapting a cost optimization strategy. This team must be able to flex to the shifting demands and impacts that COVID-19 will place on global organizations as the situation continues to evolve. They must empower the tiger team to make near-term, strategic decisions that position the organization for long-term success.

To do this, the tiger team must have the necessary data to review potential impacts on a wide range of costs including those incurred through COVID-19 communications, challenges as a result of reduced revenue and changing consumer behaviors.

Respond to the impact COVID-19 is having on marketing budgets through swift and decisive action. CMOs must build adaptable budget scenarios and conduct rapid reviews of how the pandemic may impact their marketing functions in the near term. This should be done while still keeping long-term marketing and enterprise goals top of mind.

Because there are no existing playbooks with canned strategic responses for a global event of this kind, marketers must be prepared to make near-term cost corrections. CMOs should appraise cost optimization objectives by conducting a rapid review with their tiger teams using adaptable budget scenarios that trigger decisions and action.

The effects of COVID-19 will continue to impact organizations around the globe throughout the remainder of the year and into 2021. By taking these immediate actions, CMOs can better ensure their organizations remain nimble and adaptable in the face of further uncertainties.