According to the most recent contiguous six month poll by the Association of National Advertisers (ANA), 83% of the respondents indicate they are identifying cost savings and reductions in their
current marketing and advertising efforts. While that represents a high percentage of respondents, this is improved from six months ago (87%), one year ago (93%), and eighteen months ago (87%).
Marketers Being Challenged to Identify Cost Savings/Reductions in Current
Marketing/Advertising Efforts (Base: Total Sample) |
Survey Period | % Challenged for Savings, Reductions |
January 2010 | 83% |
Jul/Aug 2009 | 87% |
Jan/Feb 2009 | 93% |
Jul/Aug 2008 | 87% |
Source: ANA, January 2010 |
The report concludes that
"The recession may be officially over, but it appears that marketers have reset their expectations and a greater degree of frugality has set in. Cost savings and reductions may be the "new
normal", even when the economy improves significantly."
In the most recent survey, 41% of respondents are planning to reduce marketing budgets by 1-5% and 70% plan reductions of
1-10%, up substantially from 55% in the July 2009 survey. Only 7% plan reductions greater than 20%, which is down sharply from 30% in July 2009. This indicates that the deepest cuts may have already
been made.
Planned Reduction in Marketing Budget(Base: Those Reducing
Marketing/Advertising) |
| Percent of Budget Planned to Reduce
(rounded) |
Survey Period | > Than 30% | 21 - 30% | 11 - 20% | 6 - 10%
| 1 - 5% |
January 2010 | 4% | 3% | 23% | 29% | 41% |
Jul/Aug 2009 | 18 | 12 | 26 | 23 | 22 |
Jan/Feb 2009 | 19 | 18 | 25 | 23 | 15 |
Jul/Aug 2008 | 10 | 10 | 27 | 33 | 19 |
Source: ANA, 2010 |
The top four ways marketers are reducing costs and spending:
- 75% are challenging agencies to reduce internal expenses and/or identify cost reductions
- 73% are
reducing departmental travel and expenses
- 53% are reducing advertising media budgets
- 50% are reducing advertising production budgets
Challenging agencies to
reduce internal expenses and/or identify cost reductions has increased in each of the surveys. But just about every other category declined in the most recent survey, notes the report.
Areas Where Marketing/Advertising Efforts Are To Be Cut Back(Base: Planning To Reduce Advertising/Marketing Costs) |
| Survey Period (% Planning Reduction |
Area of Cut-Back | Jan 2010 | Jul/Aug '09 | Jan/Feb '09
| Jul/Aug '08 |
Challenge agencies to reduce internal expenses and/or
identify cost reductions | 75% | 71% | 68% | 63% |
Departmental travel and expense restrictions | 73 | 81 | 87 | 63 |
Reduction in advertising campaign media budgets | 53 | 74 | 77 | 69 |
Reduction in advertising campaign production
budgets | 50 | 64 | 72 | 63 |
Eliminate/delay new projects | 47 | 53 | 58 | 61 |
Reduce agency compensation | 35 | 56 | 48 | 32 |
Reduction in professional development activities such as conferences and training | 35 | na | na | na |
Reduce/eliminate use of outside consultants (e.g. management consultants) | 34 | 42 | 43 | 36 |
Departmental salary and/or hiring freezes | 29 | 56 | 57 | 45 |
Alter mix of marketing channels to lower cost
channels | 29 | 46 | 44 | 40 |
Reduction in spending on research | 24 | 34 | na | na |
Decoupling of services from the agency and buy direct from supplier | 16 | 9 | 15 | 21 |
Use freelancers to fill open positions (instead
of hiring fulltime employees) | 14 | 17 | 18 | 24 |
Use open bid sourcing among agencies for projects/campaigns | 11 | 14 | 11 | 12 |
Conduct compliance audits for recovery of misbillings, over-payments | 9 | 18 | 14 | 13 |
Use
online reverse auctions to bid down/identify lowest cost supplier | 8 | 4 | 10 | 12 |
Other | 6 | na | na | na |
Source: ANA, January 2010 |
Current
responses suggest some degree of optimism since the last survey. But the deepest cuts may have already been made.The majority of marketers forecast no change in spending for the first half of
2010:
- 59% think budgets will stay the same
- 22% think budgets will be reduced
- 19% are hopeful budgets will increase
The report concludes by
saying that the recession may be officially over, but it appears that marketers have reset their expectations and a greater degree of frugality has set in. Cost savings and reductions may be the
"new normal" even as the economy improves. However, the deepest cuts are likely to have already been made.
For more details and access to the full report, please visit the ANA here.