Marketers cite the geopolitical environment as the top source of risk to their business, according to new WFA research.
Marketers feel increasingly under scrutiny from their businesses as global unpredictability rocks confidence, according to new research from the World Federation of Advertisers (WFA).
Last month, the global association for marketers surveyed 29 CMOs and global heads of public policy companies, whose companies represent roughly $65bn (£48bn) in global ad spend.
Over four in five (82%) agreed budgets are under heavier scrutiny than 12 months ago. This feeling of heightened scrutiny comes amid rising uncertainty, with a staggering 93% of respondents stating the geopolitical environment is much less or less predictable than it was a year ago.
Amid that uncertainty, a theme of short-termism arises among respondents, with 61% agreeing brands have to focus more on short-term objectives and challenges at the expense of long-term strategy planning. Half of the sample also agree their business is spending more time on risk management at the expense of longer-term objectives.
Less than a quarter (22%) of respondents say the current operating environment “feels like business as usual”. When it comes to their biggest concerns, the geopolitical environment is seen as the top source of risk by marketers, closely followed by economic trends.
Respondents were asked to score different risks on a scale of one to 10, one being no risk and 10 being the biggest potential risk. The geopolitical environment (8.4) and economic trends and outlook (8.1) came out as the biggest risks to businesses.
Tightening regulations (6.9), the pace of technological developments such as AI (6.3), the policies and practices of the big social media platforms (6.1) and brand boycotts (5.9) all also scored highly on the risk factor scale.
With the geopolitical environment deemed the biggest risk by marketers, 82% say their company’s current situation feels like a retreat from globalisation. The threat of tariffs and their potential impact in the global economy has shaken many businesses over recent months.
Brands are also becoming more cautious in how they communicate in light of increased risk, the research found. Almost three-quarters (74%) of respondents agree they are applying greater due diligence in relation to [their] marketing campaigns versus 12 months ago. A similar proportion (75%) agree they are more likely to be collaborating cross-functionally to mitigate risks in their marketing campaigns than a year ago.
As well as a risky environment necessitating cross-functional collaboration, many marketers are now experiencing more oversight from their company’s leadership, with 53% reporting the CEO is paying closer attention to their marketing campaigns than they did 12 months ago.
The research also sought qualitative input from CMOs, with many echoing the themes of uncertainty and insecurity reflected in the data.
“The economic pressures force brands to keep their heads down and just scramble to execute,” was a comment from one CMO.
While these feelings from the leaders of major brands may make for gloomy reading, there are some bright spots in the data. For example, the majority (60%) of CMOs surveyed disagreed with the idea that in the current climate it feels like they are more opportunities than challenges.
While risk is ever-present in CMOs’ minds, creativity is largely not being sacrificed. Just a third (32%) agreed creativity has been compromised by a riskier operating environment over the past year.
Lingering optimism was expressed in one comment from a CMO: “Let’s [try to] stay optimistic about our future and the things we do; it’s the only way marketing [and the world we live in] will prosper.”
