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:
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:
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.