Even as the nation’s economic outlook brightens, marketers continue to spend conservatively as budgets remain steadfast, according to the latest ANA (Association of National Advertisers) Recession survey, 6th edition. The majority of marketers surveyed (84 percent) are still being asked to tightly manage their controllable spending, which is a slight increase compared to last year (77 percent). This number peaked in 2009 with nine out of 10 marketers sharing this sentiment.
“It’s not just marketers who are feeling the pinch,” said Bob Liodice, president and CEO, ANA. “All of our partners feel the impact of this year’s projected trends, as modest spending trends undoubtedly affect business processes throughout the supply chain.”
The following are key areas of insights for this year’s Recession survey:
Only 17 percent of marketers plan to reduce agency compensation, representing the most hopeful outlook for agencies since 2008. However, 52 percent of those marketers surveyed will challenge their agencies to reduce costs internally, placing pressure on agencies to share the cost-effectiveness load.
Marketing / Media Budgets & Projected Spending
In the coming year, marketers will continue to be conscientious in their spending, even as the economy recovers. Given this cautious environment, nearly half of marketers surveyed (49 percent) said that their advertising budgets will remain the same. However, a third said their budgets will decrease (34 percent). The remaining group of respondents (17 percent) believe their advertising budgets will increase. For those companies that will reduce budgets, reductions are expected to be higher than last year, with 33 percent planning to reduce marketing budgets by 11 percent or more, compared to 25 percent in 2011.
Overhead Spending Insights
Marketers are opting for short-term budget cuts related to overhead expenditures. For example, 28 percent of marketers plan to decrease investment in professional development (e.g., conferences, training) and 21 percent plan to utilize more freelancers to fill open positions – both increases from 2011.
Some of the most popular ways marketers plan to reduce costs and expenditures include:
· Restricting departmental travel and related expenses (68 percent)
· Reducing advertising campaign media budgets (48 percent)
· Altering the mix of marketing channels to lower cost channels (40 percent)
· Eliminating / delaying new projects (36 percent)
“Though the industry outlook is trending toward stability, marketers need to be careful not to simply rely on short-term answers to solve enduring budget issues,” Liodice continued. “Marketers need lasting solutions that focus on efficiency. We need to view this as an opportunity to push our industry to reach the next level of innovation and evolution.”
This was the sixth consecutive year the ANA polled its members to uncover the vitality of industry spending as the country continues to lift itself out of the Recession. This study was fielded online in January 2012. Respondents included 248 client-side marketers.
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