It is halfway into Q1
2013, as you do a reality check of your fiscal year AOP with marketplace
conditions, here’s a little cheat sheet on what you need to know as a marketer in
order to beat the plan.

General
consensus among economists is that of weak to moderate growth in early 2013, and
a stronger recovery coming in the later half from the Housing sector, but there
are other headwinds at play that could have a dampening effect early in the
year, including the debt ceiling debate (once again), expiring tax cuts and
spending reductions (collectively known as the “fiscal cliff”). On Jan 23, the “No
Budget, No Pay Act” temporarily suspending the Debt Ceiling until later in the
year, but without congressional action this issue will resurge before year end
if there is no budget adopted by Senate by then. The recurrence rate of this
issue is taking a toll on consumer confidence and capital investment/job
creation, as indicated by low readings of the Michigan Consumer Sentiment- this
indicator, has been exceeding consensus expectations for the last couple of
months – today’s reading at 76.3 is above expectation of 75, but still well
below the low 80 readings going into 2012 year end.

On
the positive side, there’s some indication including forecasts from The World
Bank Commodity Price Forecast, of lower commodity prices in 2013, which can
provide some tailwinds[1].
The DOE also predicts lower gas prices in 2013[2],
which generally helps consumption by freeing up disposable income and driving
shopping trips up.
The
Employment report in February (for January) came in a bit below expectations at
+157K, which is lower than the previous revised number of +196K- 2012 average
growth was 181K/month.

What does this mean for your 2013 Marketing
Strategy?

If economic
uncertainty continues building up into mid-2013, then marketing strategy early
in the year should emphasize your value proposition, focusing on share growth
through Trade and Consumer promotion investment. Any relief in costs from
favorable commodity pricing changes should be passed through 100% to consumers.
Advertising focus, both online and off-line, should be on lower funnel that
aims to increase conversions by “nudging” consumers sitting on the fence on
your brands and retaining existing consumers that may be vulnerable to
competitive promotional incursions. Paid Search is especially a good way to get
in front of consumers one step before the purchase decision. Paid Search
importance is going to be even greater in driving conversion with Product
Listing Ads (Google Shopping’s new rich ads functionality[3]).