Marketers: Media Budgets Will Rise With Economic Upturn

forecast-arrow Marketers plan to hit the ground running once the economy takes off.

For now, however, they are in a holding pattern of short-term strategies, according to a study by the Association of National Advertisers (ANA) and 'mktg,' a marketing services company.

Media budgets will be increased as conditions improve, according to more than two-thirds of the respondents (68%) to an April online survey of members of the ANA Brand Marketer Leadership Community panel. Forty-one percent said they will step up social networking/word-of-mouth, and 40% intend to raise spending for innovation and testing/learning.

Almost three-quarters of the respondents (73%) said they hope to employ these increased marketing activities three to six months before the recession ends, and by an additional 16% as soon as it ends.

The survey received responses from 129 client-side marketing executives.

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"The landscape for building brands was jolted by the severity of the economic downturn," says ANA President and CEO Bob Liodice. "However, it is encouraging to see that marketers are preparing for the rebound with plans for increased media spending, strategically sound brand- building investments and logical, expansive use of social media."

Relatively few respondents reported delaying or suspending any marketing initiatives, but many said the efforts are being reduced, including media budgets (56%), production budgets (50%) and sponsorship/events activities (41%).

Activities that are most likely to be maintained throughout the recession include research and development (47%), public relations (42%), innovation/test/learn budgets (33%) and promotion activities (33%). Activities that are most likely to be increased in the current economic environment are pricing deals (47%), social networking and word-of-mouth activities (26%) and public relations efforts (23%).

The survey also polled marketers on long-term branding decisions and measurements. Some questions trended against identical questions asked in previous surveys. Brand equity is highly important, with metrics squarely focused on the consumer. Products are the most important item to building brand equity (89%) and customer service is a close second (86%). Employees as advocates for a brand are also critically important (81%).

The most effective measure of brand health (defined as the measure by which brand equity is increasing or declining) is customer experience/ satisfaction, which increased to 48% in April 2009 from 37% in February 2007. There is less focus on traditional metrics such as brand image and awareness, which tend to be lagging indicators of brand health.

Warning signs of brand deterioration have also shifted, with increased importance being placed on customer-related metrics. According to the survey, marketers are more focused on brand health metrics compared with February 2007, with increased attention on customer conversion/repeat rates (78% vs. 70%); percentage of customers who rate a brand as "excellent" (77% vs. 68%) and net promoter scores (73% vs. 67%).

"Marketers have increased their emphasis on gauging consumer sentiment and brand health trends," says Roger Adams, chair of the ANA Brand Management Committee. "With the proliferation of instant feedback using consumer-generated media, marketers can assess the impact of brand marketing campaigns to quickly gauge brand equity, health and signs of deterioration."

Media channel effectiveness for building brand equity has also shifted materially. While television is still ranked most important (64%), online (61%) and guerrilla/word of mouth/buzz marketing (57%) have become nearly on par with television, with social media ranked as the next-highest effective media channel (40%). Social media ranked highest as the media channel that marketers would like to use but have not yet been able to implement.

Traditional media channels have declined in importance since the first survey was conducted in February 2007, with television down to 64% from 80%, magazines down to 51% from 67%, and radio down to 30% from 36%. Outdoor was down to 26% from 35% and newspapers dropped to 19% from 36%.

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