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Marketing outlook worse than expected

Written on
Feb 11, 2009 
Author
Edward Barrera  |
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Marketing outlook worse than expected

norecession_small.jpgADOTAS — Marketers plan to slash advertising budgets more than expected, a new study reveals.

According to the Association of National Advertisers, more companies are identifying cost savings and reductions as compared to a study done in August, 93 percent as opposed to 87 percent six months ago, and that 37 percent of respondents plan to reduce budgets by more than 20 percent, up substantially from the 21 percent of respondents in the earlier survey.

“In the current economic environment, there’s a need for brand building that’s right for the times – that acknowledges consumers’ financial circumstances, and offers them products, services and solutions that meet their needs,” Bob Liodice, ANA President and CEO, said in a statement. “For some marketers, that will mean skewing their media mix towards promotional spending and direct marketing. For others it will mean framing a new, relevant and timely brand message.”

In addition, the study says marketers plan to reduce costs or expenditures in marketing and advertising efforts are as follows:

- Departmental travel and expense restrictions (87 percent, versus 63 percent in the previous survey)

- Reducing advertising campaign media budgets (77 percent, versus 69 percent in the previous survey)

- Reducing advertising campaign production budgets (72 percent, versus 63 percent in the previous survey)
- Challenging agencies to reduce internal expenses and/or identify cost reductions (68 percent, versus 63 percent in the previous survey)
- Eliminating or delaying new projects (58 percent versus 61 percent in the previous survey)

Other tactics gaining greater consideration by marketers today, as compared to six months ago include:

- Departmental salary or hiring freezes jumped to 57 percent from 45 percent six months ago

- Forty-eight percent of marketers are looking at reducing agency compensation, versus 32 percent six months ago

In the earlier study, 53 percent of marketers thought their advertising budgets would be reduced in the next six months, but 71 percent actually experienced a budget decrease. Thirty-eight percent thought their budgets would remain the same, but only 23 percent had their budgets untouched. Nine percent thought they would see a budget increase, when only six percent did.

When asked about their predictions for what will happen in another six months from now, 49 percent of respondents felt that their advertising budgets would be reduced, while 43 percent think that they will stay the same and only eight percent have hope that their budgets will increase.

In both surveys, conducted online, marketers working in a range of industries were surveyed including pharmaceutical, financial services, consumer packaged goods, computers and technology, retail and others.

– Express your opinion, comment below.





Reader Comments.

Mr. Liodice is correct. The need for brand building that’s right for the times is very significant!

Executives cannot continue to make decisions on what the market ought to be, but what the market is TODAY!

Brands throughout history have shown that the organizations that maintain or increased their marketing practices throughout tough economic times remained or became strong players in their industry.

The key is simply finding the marketing/advertising agencies that will provide the same services as the big name agencies but without the big name price.

Posted by Nicole Galletta | 4:07 pm on February 12, 2009.

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