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February 19, 2009
Good news and bad news on marketing budgets
There's good news and bad news. The bad news first, from the Association of National Advertisers as reported by Media Post. A new survey of ANA of its members on how they are cutting marketing budgets in this nasty recession:
- 87% are adding departmental travel and expense restrictions
- 77% are reducing advertising campaign media budgets
- 72% are reducing advertising campaign production budgets
- 68% are challenging agencies to reduce internal expenses and/or identify cost reductions
- 58% are eliminating or delaying new projects
- 57% are freezing salaries or demanding hiring freezes
- 48% are looking to reduce agency compensation
Here's my take on the opportunities within that bad news:
- If travel is being cut, that's good news for producers of webinars and virtual events
- If ad campaign media budgets are being cut, that's good news for customer loyalty evangelists whose voices are often drowned out by business development and sales
- If ad campaign production budgets are being cut, that's good news for people who manage metric-driven systems like SEO and NPS
- If agencies are being forced to reduce internal expenses, that's good news for companies that make inexpensive project management or collaboration software
- If agency compensation is being cut, that's good news for start-up agencies that don't have the overhead of existing ones, or agencies that haven't had the impetus to reinvent themselves using a social media lens rather than a broadcast media lens
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Nice points. Always good to hear the positive side to recession news, and I agree it's a great opportunity for marketers to provide new, more appropriate solutions to their clients. I wonder if the changes that companies make will be long-term changes or just in the short term. Once they see how effective webinars and virtual events can be, maybe they'll never go back to live shows....
Every unresolved problem is an opportunty for someone to become a leader in their space.
Great reminder!
Kirsti -- They probably will go back to live shows, to some extent, since they can be fairly profitable if all of the stars are aligned right.
Mark -- I'm reading "Snowball," the biography of Warren Buffet and learning how Buffet's father launched a stock broker company very soon after the market crashed in 1929, eventually creating great success for the Buffet family.
I have been producing webinars since 2001- right after 9/11 when companies stopped spending money on travel. Today, my business is better than ever. My clients are looking for ways to do more- with less. They still need to stay in front of their customers, but simply don't have the staff or budget to make those frequent in person visits or to host the lavish breakfast seminars. Webinars are the great equilizer. No matter your company's size or budget, you can still have a huge presence through these online meetings AND the results are impressive. My clients are getting good pieces of business through these events!
Thanks so much for your timely topic. The smart businesses are those who are nimble enough to reinvent themselves and take advantage of the ever changing resources that are available.
I have been producing webinars since 2001- right after 9/11 when companies stopped spending money on travel. Today, my business is better than ever. My clients are looking for ways to do more- with less. They still need to stay in front of their customers, but simply don't have the staff or budget to make those frequent in person visits or to host the lavish breakfast seminars. Webinars are the great equilizer. No matter your company's size or budget, you can still have a huge presence through these online meetings AND the results are impressive. My clients are getting good pieces of business through these events!
Thanks so much for your timely topic. The smart businesses are those who are nimble enough to reinvent themselves and take advantage of the ever changing resources that are available.
I like the positive spin!
These are GREAT OPPOTUNITIES Ben! Isn't it funny how "predictable" big businesses are? "The quick eat the slow"! It's no wonder why so many large companies are laying people off!
Thanks for the good overview. I'd love to talk with others more about this upside point you made:
"If ad campaign media budgets are being cut, that's good news for customer loyalty evangelists whose voices are often drowned out by business development and sales."
My focus is on growing customer retention, so this would seem like a good time to get in the door. However, I find that companies are focused internally and are mentally conservative to it's hard to even get them to consider something that is low cost and can sustain their business - like growing relationships and retention. Maybe we can talk about this on the SWOM site.
20-23% for marketing is too low, really. This survey have a wrong base and is inaccurate.
Forbes Russia (december) forecasts that budgets will be reformed in favour of internet marketing.
Yaroslav Vityasev, Delosite PM,
http://www.delosite.ru/
Ben, we are certainly kindred spirits. I love to turn negativity upside down. Thanks for this really great post.
Brains on Fire has gotten a couple of pointed attacks lately: How can you be so positive? Do you live in a bubble? What about people who have lost jobs? I hear that with my head and my heart, but honestly we all have to stop complaining and reset our world and our businesses to the new reality. And the new opportunities!
Onward!
You really have thought this through! I firmly believe there are always opportunities for leaner firms in times of recession. insightful post - thanks.
