• by Nina Lentini  @Nina_Lentini, February 10, 2009

Marketers knew things were bad six months ago, but a new survey from the Association of National Advertisers (ANA) shows they didn't realize quite how bad.

More companies are now identifying cost savings and reductions (93% versus 87% in August) and 37% plan to reduce budgets by more than one-fifth, which is much higher than the 21% of respondents who planned to do so six months ago.

To make lemonade from these lemons, ANA President Bob Liodice said in a statement that there is a "need for brand building ... that acknowledges consumers' financial circumstances, and offers them products, services and solutions that meet their needs.

"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."

It's going to be harder to do so. Asked to look ahead, almost half say their advertising budgets will be reduced, 43% think they will remain the same and just 8% are holding out hope for budget increases.

Both surveys, conducted online, included marketers working in a range of industries, including pharmaceutical, financial services, consumer packaged goods, computers and technology and retail.

The latest survey finds that marketers plan to reduce costs by:

• Restricting departmental travel and expenses (87% versus 63% previously);

• Reducing ad campaign media budgets (77% versus 69%);

• Reducing ad campaign production budgets (72% versus 63%);

• Challenging agencies to reduce internal expenses and/or identify cost reductions (68% versus 63%),

• Eliminating or delaying new projects (58% versus 61%).

The idea of freezing salaries and hiring has gained currency, jumping to 57% from 45%, while nearly half (48%) of marketers are considering reducing agency compensation versus one-third who were doing so last summer.

In the first survey, the ANA asked if marketers thought their budgets would increase, decrease or remain the same in the next six months. In the recent survey, the ANA asked what actually happened.

• In July/August, 53% thought their advertising budgets would be reduced in the next six months, when in fact, 71% experienced a budget decrease.

• 38% thought their budgets would remain the same, but only 23% had their budgets untouched.

• 9% thought they would see a budget increase, when only 6% did.