Advertising response rates fall in Q1

15 May 2009

LONDON: Consumer response rates to advertising and marketing communications fell by an average of 28% in countries including the US, Europe and Australia in the first quarter of 2009 on an annual basis, and also declined by 14% in developing markets like India and China, research from the Fournaise Group shows.

It has been argued that consumers are adopting a range of distinctive strategies in response to the current recession, but also that advertisers need to maintain their spending levels in order to retain their position both during and after the downturn.

The Fournaise Group tracked advertising and marketing campaigns, both offline and online, in a diverse range of markets, and found that, on average, response levels were down by over one fifth year-on-year.

Among the areas assessed by the company were increases in sales, retail traffic and lead or prospect generation, as well as upturns in "positive target audience conditioning."

Despite cutbacks in spending and the improved ad rates offered by many media companies, it reported that the "marketing wastage rate" increased by 13%, to 61%, in Q1 year-on-year.

Categories posting above-average declines in responsiveness included "big-ticket" sectors such as automotive, travel and finance.

By contrast, FMCG and retail campaigns enjoyed a growth in positive activity, leading the research firm to suggest that lower value products and services are currently eliciting higher rates of interest.

Jerome Fontaine, ceo of the Fournaise Group, argued that the overall drop in response rates was in line with consumers in advanced markets "tightening their belts and controlling their expenditures."

Similarly, the smaller comparative contraction in markets like India and China was indicative of the fact that these areas have been "relatively less affected" by the current financial crisis.

Data sourced from Fournaise Group; additional content by WARC staff