Predicting the future: challenges facing arts marketing in the UK over the next ten years

Citation

Rowlands, J. (2012), "Predicting the future: challenges facing arts marketing in the UK over the next ten years", Arts Marketing: An International Journal, Vol. 2 No. 1. https://doi.org/10.1108/am.2012.52002aaa.002

Predicting the future: challenges facing arts marketing in the UK over the next ten years

Article Type: Creative insights From: Arts Marketing: An International Journal, Volume 2, Issue 1.

Most arts organisations don’t have a crystal ball to help predict the future, but what if we could get some insights from leaders working in the cultural sector that allowed us to think through the issues that may be facing us in ten years time? If we could address those issues in strategic planning would we be better armed to deal with the unknown? As a marketing professional working primarily in the arts I have long been interested in how marketing can help to address wider organisational issues and, given the wholesale change we have seen in the sector over the last two years, what better time to take stock and plan for the future.

I was given the opportunity to explore this area as part of the Clore Leadership Programme, an initiative aimed at strengthening leadership in the cultural sector. Now in its eighth year the programme has seen over 200 participants, many of whom have gone on to work in prominent roles in the cultural sector. As part of the two-year programme I was required to undertake a research project that looked at an aspect of leadership. As one of the only marketing professionals to undertake the programme I was keen to look at an aspect of leadership that addressed marketing from the point of view of the whole business of a cultural organisation. In particular, I wanted to look at the key issues concerning arts organisations and how they relate to marketing. To this end, I aimed to develop a picture of the marketing challenges facing the UK arts sector over the next ten years in an attempt to pre-empt, and begin to plan for, potential issues.

In developing the research idea I was influenced by the context of the current financial climate and its effect on the cultural sector. During the last decade the sector saw remarkable growth under a Labour government that increased budgets for culture by around 70 per cent (Toynbee, 2011). Now, with Arts Council England experiencing significant funding cuts and having been forced to remove around 200 organisations from its portfolio in April 2011, the environment is quite different.

In order to understand issues facing the cultural sector over the next ten years I identified eight cultural leaders from across the sector and conducted in-depth interviews either face to face or by phone. In selecting interviewees I was keen to get a spread across different disciplines including performing arts, visual arts and film, different geographical areas and a range of roles, such as Marketing Director, Chief Executive and Artistic Director, providing a range of responses from different viewpoints. Interviews were recorded, transcribed and subjected to template analysis.

In developing a framework for the research I was interested to know how current challenges related to past attempts to define marketing challenges. In particular I focused on Kotler's (Mokwa et al., 1980) series of challenges in marketing the arts, the 1995 Arts Council goals for arts organisations to meet (Hill et al., 2003) and a more recent (2010) American blog which asked a series of arts leaders what they thought the challenges were.

From this I developed a series of questions that informed my interviews. These included; Are audience development, membership development and fundraising still challenges?; Do we use marketing tools effectively, improving market intelligence and knowledge of audiences and consumer behaviour?; Do we use technology to our best advantage?; How will a shift in demographics and the lack of formal art education affect us?

On analysis of the interviews concerns raised seemed to fall into one of four areas – political, economic, sociological and technological – and therefore I have used a traditional PEST model to show the findings. Concerns could be further categorised as short-term issues (between one and two years) or long-term issues (up to ten years).

Political issues tended to be at the forefront of people's minds. In the short term, they talked about having to adjust to a change in the political leadership of the country. With a change in administration came a hands off approach and a perceived lack of value in the arts. The political change has meant an ideological shift that has less emphasis on access and diversity without another clear agenda to take its place. There was a general sense that people are unclear about the expectations of central government and without clear targets it was more difficult to demonstrate value and impact. When it came to governance there was a feeling that a smaller Arts Council would be under a great deal of pressure and the addition of MLA's portfolio would add to a workload that was already stretched. Central government changes were perhaps of most concern to those organisations with national status who received funding directly from a government department while how those changes affected local government most occupied local authority funded organisations.

In the long term, people were keen to explore how their organisations became part of a place and play an active role in civic leadership. This was especially an issue for new organisations who wanted to establish themselves as relevant and exciting for a population. It was also particularly pertinent to those organisations based in regional cities. Organisations are keen to show value to stakeholders and audiences. Regardless of the political agenda people felt the cultural sector played a role in issues such as social inclusion but were unclear how this would work without political will. Issues raised were particular to the context of each organisation. For example, two visual arts venues I looked at similar in size, age and artistic direction had very different challenges to contend with due to their geographical position. While one was able to serve a small but engaged audience in an affluent city the other was struggling to make their programmes relevant to local residents who had no history of engaging with the arts at all. This served to highlight that arts policy is often global across sectors and size of arts organisations, which makes it hard to address issues.

The economic factors listed by interviewees were perhaps the largest risk areas for organisations in particular the reduction in core and project funding and the pressure on staff to develop other income streams. In the short term, due to the economic climate, people felt audiences would undoubtedly have less disposable income and therefore theatre tickets or lunch in the cafe might become less important to people.

Despite the pressure from central government, interviewees felt that encouraging philanthropy at this time might prove difficult and time consuming. As there will be less funding with more organisations vying for the same pots of money all acknowledged that developing other income streams was an area that must be addressed, but most felt that it was not resourced sufficiently. One director of a visual arts venue was concerned about the combination of a substantial short fall in the budget caused by local authority cuts teamed with the lack of a specialist fundraiser. The result is pressure on the leadership function to fulfil this fundraising role potentially at the detriment to other areas of responsibility.

In the long term, leaders felt there would be far less financial security for individuals, who may have smaller pensions and less savings. Organisations would also suffer from less stability with reduced public funding. It was felt that free venues may be forced to develop scaled back programmes. Most people did not think there was a correlation between less secure finances and taking risks with the programme, however, there was an acknowledgement from those relying on income from ticket sales that it was necessary to balancing ambitious programming with safe bets. In general, theatres appeared less concerned about economic issues than visual arts venues as they had a more varied funding supply.

The sociological issues that came up could also be described as understanding audiences. Sixteen years on from the Arts Council recommendation to “develop a more consistent approach to market intelligence” people reported in the main they had good systems but that they weren’t using them to their full potential. Theatres in particular are collecting, or have the capacity to collect, detailed information that could inform marketing strategies but in the main they relied on less scientific, more anecdotal evidence. In the long term, people were keen to see a more strategic approach to audience development and voiced concerns about the future of the audience development agencies. That said, some also expressed optimism that the ACE and MLA merger may well give us more opportunity to see the bigger audience picture across the sector. Interviewees expressed a need to gain more understanding of customer expectations of both product and service in order to increase loyalty and repeat visitors. The changes within the media were cited as having a major effect on the way organisations are perceived by audience, in particular the little room given to arts coverage and the explosion in citizen journalism.

Long term, people were thinking about the demographic trends and how these might affect their organisations, for example how they might serve older age groups or a more diverse population? People acknowledged that changes to art education policy and higher education funding would have a big impact on future audiences. With humanities degrees far more expensive and with less political backing not only will there be potentially fewer audiences but maybe fewer artists and performers. This will depend on how the recommendations from the Henley Review of Cultural Learning are taken forward in the coming years.

Technological concerns were raised but it was evident this was the area where interviewees displayed the least understanding of the issues and, importantly, the solutions. In the short term, people reported that since the advent of the internet customers had far higher expectations from arts organisations in this area, from the way they presented themselves online to engagement and the role audiences play in programming. The lack of ability to predict what's next when it comes to online developments was a major issue and will have long-term implications for resourcing and developing workforce skills and knowledge. Often technological issues were being dealt with on a tactical level within a number of different departments. In the future interviewees acknowledged a holistic cross-organisational approach would be required. Importantly, interviewees described this as a priority but a lack of resources meant that it wasn’t being harnessed.

To conclude, the challenges faced by arts organisations are not wholly different from those outlined by Kotler in 1980. Although a lot of progress has been made, there are still gaps in understanding audiences and a need to build loyalty and develop new income streams. Work needs to be done to resource these areas appropriately if further progress is to be made which, in straightened times, is a significant ask. That said, there are some things that could be addressed without considerable outlay such as harnessing social media, making the most of existing ticketing systems or sharing data to create a bigger picture of arts audiences. Developing income streams isn’t out of the question either, some of the organisations I spoke to were looking at new business models that went far beyond public funding. In particular a regional theatre was beginning to co-produce shows that transferred to the west end bringing in income well after they had finished playing at their venue. Non-ticketed visual arts organisations appear, on the surface, to be less able to create alternative income streams and are more reliant on public funding but in my opinion it is these venues, their collections and their auxiliary services that have the most potential.

More broadly, it is important for arts organisations to be planning further ahead. Many I spoke to were working to a short-term planning cycle which was linked to funding rounds, particularly in the case of local authority funded organisations. This kind of short termism makes initiatives such as building audiences and loyalty very difficult. Even looking five years ahead, if ten is too much of a stretch, would be beneficial for arts organisations. The kind of environmental scanning I have done here could be done collectively between a number of like-minded organisations.

The sector still has some way to go to show value to audiences and galvanise support from stakeholders, funders and politicians. Getting this right would serve to build vital loyalty (and its accompanying financial benefits) that arts organisations need. Perhaps most importantly, cultural organisations need to ensure they play a part in the civic leadership of a place and are relevant to the audiences they serve. One regional theatre I spoke to took its responsibility to local audiences very seriously and was keen to ensure its services were as relevant to everyone in the city regardless of background or propensity for theatre going. It did this by connecting at a strategic level with city leaders, producing a diverse programme with audiences in mind and creating initiatives based outside the theatre walls. When an organisation is relevant to its audience the message to the stakeholders, politicians and funders will follow. It is telling that where we see organisations under the threat of closure those that survive do so through public support. Even though we don’t have that crystal ball it seems that regardless of the environment how we engage with audiences will shape the future of cultural activity in the future.

Joanna RowlandsMarketing and Communication Consultant

Further reading

Bauman, C. M. (2010), “Biggest marketing challenge of the next 10 years”, available at: http://arts-marketing.blogspot.com/2010/03/biggest-marketing-challenge-of-next-10.html (accessed 7 March 2010)