ANA: Clients Challenge Agencies To Cut Ad, Marketing Budgets

by , Mar 30, 2012, 1:56 PM
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The recession may be officially over, but marketers are under increasing pressure to find cost savings and reductions in their marketing and advertising budgets. Those efforts will impact ad shops, as many clients are asking their agencies to identify potential cost cuts that go beyond merely trimming ad-spending budgets.

That’s the word from Bill Duggan, group executive vice president at the Association of National Advertisers. In a March 28 entry in his ANA blog, Duggan reported some of the findings from the ANA’s 2012 “Recession” survey that polled nearly 250 marketing executives from member ranks.

The results showed that 84% of the respondents indicated they were currently challenged with identifying ways to trim costs related to marketing and advertising efforts at their companies. That’s up significantly from last year, when 77% said they were faced with that challenge. This year’s figure is even slightly higher than 2010, when the dust was just beginning to settle from the previous year’s recessionary turmoil.

Nearly half of those who said they are looking for reductions cited media budgets as a target of opportunity. And 52% said they plan to ask their agencies to find additional ways to cut costs, such as reducing internal expenses that get passed on to the client.

More than two-thirds of those polled said they would take a hard look at their own departmental travel and expense budgets, with an eye toward cutting them back.

“The new reality is that marketers will continue to be conscientious of their spending, even as the economy recovers,” Duggan concluded.

Other findings from the survey are reserved exclusively for ANA members.  

2 comments on "ANA: Clients Challenge Agencies To Cut Ad, Marketing Budgets".

  1. Henry Blaufox from DragonSearch
    commented on: April 2, 2012 at 11:05 a.m.
    This isn't complicated. Agencies will have to focus all efforts on value to clients, not anything that can be perceived as perks or extra comforts - and therefore "waste." All the other outside service providers have been through this with corporate clients. Agencies in the expensive locations will have to accept belt tightening as well. Find more cost effective ways to provide your services. If some work can't be done profitably in-house, consider subcontracting to outside specialists who maintain quality while doing the work on your behalf at a lower cost.
  2. Peter Rosenwald from Consult Partners
    commented on: April 2, 2012 at 8:03 p.m.
    This issue has all the up-to-datedness of Mad Men. As the former founder and CEO of two large direct marketing agency groups, I am well aware of the incredible levels of waste that are endemic to the agency business. Clients want to see that you offer a wide range of services but then hesitate to pay for them. The fact is that clients should not waste their time worrying about taxi fares and should instead demand performance metrics that accurately measure the ROMI, the return on the marketing investment. If this meets realistic guidelines the client will both save and make far more money. The problem is that agencies may find this a much tougher game than a round of cost-cutting.

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