Commentary

Marketing Plans Take a Beating

by Jack Loechner , Staff Writer @mp_research, February 19, 2009

A new survey from the ANA (Association of National Advertisers) shows that the recession had a more profound effect on the marketing industry than predicted just six months ago,. Following up on a survey conducted in August, the second survey conducted on this topic reveals that more companies are identifying cost savings and reductions (93% as opposed to 87% six months ago) and that 37% of respondents today plan to reduce budgets by more than 20%, up substantially from the 21 % of respondents in the first survey.

The top five areas where marketers plan to reduce costs or expenditures in marketing and advertising efforts are:

Departmental travel and expense restrictions (87% versus 63% in the previous survey)
Reducing advertising campaign media budgets (77% versus 69% in the previous survey)
Reducing advertising campaign production budgets (72% versus 63% in the previous survey)
Challenging agencies to reduce internal expenses and/or identify cost reductions (68% versus 63% in the previous survey)
Eliminating or delaying new projects (58% versus 61) 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% from 45% six months ago
48% of marketers are looking at reducing agency compensation today, versus 32% six months ago

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% of marketers 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 six% did

When asked about their predictions for what will happen in six months from now:

49% of respondents felt that their advertising budgets would be reduced
43% think that they will stay the same
8% have hope that their budgets will increase

Bob Liodice, ANA President and CEO, concludes that "... some marketers, (in the current economic environment)... will skew their media mix towards promotional spending and direct marketing... others will frame a new, relevant and timely brand message."

For more information, please visit the Association of National Advertisers here.

ad spending, earnings, marketing, media planning, research

3 comments about "Marketing Plans Take a Beating".

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Thriftarella Consignment from Thriftarella's, February 19, 2009 at 11:12 a.m.
"Advertising is not a luxury, it's business, do one less luncheon a week." Christine Quatrini of Thriftarella's, Davie, FL.
Reply

Stephen Cobb from Monetate, February 19, 2009 at 1:04 p.m.

Maybe a useful concept to introduce at this time of almost universal belt-tightening is net spend. In tough times it may be wise to reduce marketing's net spend, but that's not necessarily the same thing as cutting total spending.

When a marketing project or purchase can show positive, measurable ROI, then it's cost is not a net spending increase. Delaying or abandoning a project that can deliver a positive return, measured in things like revenue lift, it would seem to be counter-productive.

The brands that recognize this will continue to spend during tough times and by doing so obtain a significant advantage over short-sighted competitors whose reaction to tough times can be summarized as "no new spending at any cost."

Tyler Willis from Involver, February 19, 2009 at 5:46 p.m.

Stephen, you're bang on -- and I think the industry is actually taking that approach en masse. While budgets are being cut, there are projected spending increases in the types of marketing that have high engagement with the customer and/or high ROI. Email marketing, search advertising, and video are all on the rise.