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The Markets in Motion Study:
What Every CMO Needs to Know to Make Marketing Decisions During The Covid-19 Recession

By David J. Reibstein, Stephen Diorio, and Raghu Iyengar

Marketers are in the midst of a unique pandemic induced recession. For many, it is their first as a business leader. The decisions they make during this recession have major and immediate implications for their future profits, competitiveness, and careers.

This study is designed to help CMOs learn from the past and make the best possible decisions about where, how, and when to invest to maximize firm revenues, profits, and share. A team of experts from The Wharton School examined how business leaders should adapt to the current recession in the context of history, known academic research, and a survey of 352 CMOs to understand the actions growth leaders are taking today in the wake of the Covid-19 recession.

This in-depth analysis of academic, business, and primary market research has two clear recommendations to business leaders:

1. Increase investing in marketing and innovation during the recession if you can. While conventional wisdom and current management behavior suggest cutting discretionary spending on marketing and innovation in the face of shrinking demand is the accepted course of action, historical facts suggest otherwise. At a time when 66% of businesses have cut spending on marketing and innovation, there is no evidence cutting spending in a recession improved profits, growth, or share in the short or long term. In fact, our analysis strongly indicates that investing during a recession is a smart and valuable investment, particularly through the lens of growing profits, share, and firm value. Yet, 10% of today’s CMOs told us they plan to increase growth investment during the recession.

2. If not, anticipate and prepare for significant changes. Another lesson is that business leaders should not expect a return to the status quo in the recovery. The facts show that recessions significantly restructure markets and only a fraction (under 10%) thrive in the following years. Many of the changes in customer behavior, sales force engagement, and general business models are not temporary but may lead to a fundamental change in behavior. A third of CMOs believe their go-to-market model will change forever as a direct result of this recession.

Marketing leaders have limited time or resources to make the difficult resource allocation and investment decisions they must make in the coming year. With planning for the 2021 fiscal year just months away. The decisions business leaders make about where to cut, invest, and refocus their growth resources will disproportionately define their future profitability and competitiveness in the new buying reality. With a reduced and, in many cases, negative cash flow it is hard to garner internal support for spending during the downturn. That said, the historical evidence is clear, the return per dollar spent may never be greater than what can be gained by spending at this time. This is important for both the short-term as well as the long-term. New leaders will be determined today that will persist into the future. The future of the business will be determined by how one spends in the present.

Markets in Motion Series with Raghu Iyengar and David Reibstein

Hear from marketing experts on how they are pivoting their business strategies and innovating in a time of disruption due to the COVID-19 pandemic.

Selorm Adadevoh, Chief Executive Officer of MTN, Ghana

Zack Anderson, CDAO at National Westminster Bank

Steve Barsh, Managing Partner of Dreamit Ventures

Jill Baskin, Chief Marketing Officer of The Hershey Company

Raj Beri, Global Head of Grocery and New Verticals at Uber

Jonnie Cahill, Chief Marketing Officer of Heineken USA

Amit Choudhary, COO and Executive VP of Global Financial Services SBU at Capgemini

Tina Edmundson, Global Brand & Marketing Officer at Marriott International

Christopher Gruits, Executive Director, Annenberg Center for Performing Arts

David Haigh, Chief Executive Officer at Brand Finance

Aimee Johnson, Chief Marketing Officer at Zillow

Angie Klein, VP of Consumer Segment Marketing at Verizon Wireless

Boyd Martin, US Equestrian Olympian

Brett McClung, President & Chief Executive Officer of Baptist Health

Santosh Misra, Commissioner of e-Governance for the Government of Tamil Nadu

Jamie Moldafsky, WG’89, Chief Marketing and Communications Officer at Nielsen

Tony Pace, President and Chief Executive Officer of Marketing Accountability Standards Board

David Rabin, Vice President of Global Commercial Marketing at Lenovo

Jill Renslow, EVP of Business Development and Marketing at Mall of America

Vineet Sharma, Chief Operations Officer at Pizza Hut Asia Pacific

Eric Stone, Chief Executive Officer & Co-Founder of Velano Vascular

Kate Sullivan, Director of Marketing and Branding at Philadelphia International Airport

Connie Weaver, Chief Marketing Officer of Equitable

Interviews with Stephen Diorio

David Reibstein, William Stewart Woodside Professor, Professor of Marketing

Raghu Iyengar, Professor of Marketing, and Faculty Director, AI and Analytics for Business

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