Road To 2022: How to account the rising inflation in the media mix for the New year

Prices across sectors will be soaring in 2022 resulting in a sharp spike in the inflation rate. Anil Nair, CEO, VMLY&R, shares his two cents on how the A&M world can prepare for the same and account for inflation while charting the spends for their marketing and media mix.

The Pandemic has had brands, marketers, and communication agencies between a rock and a hard place due to the continuing uncertainty, the relentless discovery of new variants, and threats of future lockdowns.

This has been both a hitherto unknown minefield to navigate and a negative spiral to mitigate. Cutting down on spends hinders creation of future demand which in turn leads to inflationary conditions because balance and cadence have been disrupted.

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While external conditions cannot be influenced marketers need to look internally and try and make sense of factors that are within their control.

1. Invest in platforms and ecosystems: This is a great time to earmark and apportion some of the spends in medium to long term investments in both platforms which include technology infrastructure plus digitisation efforts and ecosystems which include partnerships, alliances and media properties.
2. Changing from a ‘fireworks to fireplaces’ communications strategy: its time to go ‘closer to consumer’ and/or to go ‘consumer-in’ rather than brand out. This allows for sometimes cheaper and more organic media investments , earned media opportunities and usage of brand influence.
3. Focus on ‘brand love’ and ‘customer experience: customer centricity is a much abused term but a true evaluation and continuous improvement  of one’s customer experience is very cost effective especially in retention and increasing Customer Lifetime Value(CLV).
4. Funnel thinking is everything: focussing on your marketing funnel, understanding the interconnectedness and interdependencies of the same helps mitigate inherent inefficiencies that exist as you draw potential customers to closure.
5. Data is the key to Meta: A lot has been already said about data readiness for brands. FPD can help unlock a lot of the above, help precision targeting, optimise media spends, help in product and service improvement, sharpen distribution etc.. In short a super pill for all problems.
6. Pivoting through innovation: In this new Digital Economy Era, saying still is akin to being dead. There is a need to have an agile, constant beta, innovation DNA to be one step ahead of the competition and the marketplace.  ‘Test fast, Fail fast, Adapt fast’ Is the new success algorithm.
7. Challenging the Status Quo Metric: Finally since this is an essay on dealing with inflation and optimising spends, marketers will do well to recalibrate their success measuring mechanism from ROI ( Return on Investment) to ROCI (Return on Contextual Investment). The marketing ecosystem has become so complex that it will be foolhardy and short-sighted to depend on the simplistic ROI model to do broad brushstroke judgements. The channels are interconnected, fungible and inter-operable. Which means that one will need to make contextual judgements on effectiveness and investments with both a short term and medium to long term view.

All in all, this is an exciting time to be a marketer. As the transition from the industrial to the digital era is underway. There will be turbulence and uncertainty. And our ability to deal with the latter will determine our success.

The article is authored by Anil Nair, CEO, VMLY&R as a part of Social Samosa's #RoadTo2022 series.