NEW YORK: A survey from the Association of National Advertisers released Friday indicates that US marketing budgets are following the same downward curve identified last month in the UK's Bellwether Report.
As with their British counterparts, US marketers are bracing themselves for a round of boardroom budget-slimming, according to the ANA survey. Fifty-three percent of those polled said they expected a cutback within the next six months; 87% said they're already riding-out the storm.
- Of the 87% already identifying cost savings, more than half believed their overall marketing budgets would be reduced between 1% and 10%;
- 27% thought their budgets would be reduced between 11% to 20%; another 10% of respondents fearing the worst, estimated cuts greater than 30%.
- Of those planning cuts 69% said they'll reduce media budgets; 63% said they'll reduce production budgets; 63% will pressure agencies to reduce expenses; 63% will restrict travel and other expenses; and 61% said they will eliminate or delay new projects.
ANA president/ceo Bob Liodice
was surprisingly laid-back. "We've seen this before," he told AdAge
. "Ad spending tracks remarkably close to GDP."
Continuing in PollyAnna mode, he pointed out that marketers who had increased spending during previous recessions enjoyed more sustained growth when they emerged from the doldrums.
"It's a great opportunity to capture some shared market," proselytized Liodice. "Effective marketing spending during economic downturns is not about how much you spend, but also how you spend it." One step down the food-chain, the planet's ad, media and marketing agencies are fearful that, despite spending boosts from the Olympics and US presidential elections, 2008 will be a year best forgotten.
Of more than eighty agency ceos worldwide who participated in a survey conducted last month, 60% believe that economic conditions in their markets had worsened year-on-year.
Over the same period, 65% thought that their regional economy had taken a turn for the worse.
Participating ceos are all members of the privately held, Denver-based global agency cooperative Worldwide Partners, which manages more than $4 billion in marketing budgets globally.
Budgetwise, nearly half of North American ceos (46%) reported clients had reduced spending since a year ago. Slightly less said that spending had remained steady, while just 10% reported clients had upped marketing spend.
Globally, 38% of ceos reported clients had cut spending. Only agency ceos in emerging markets are optimistic about their business in the current economic climate.
Al Moffatt, ceo of Worldwide Partners, names the Latin American and Asia-Pacific regions as those where network ceos "believe their clients will be expanding more internationally".
"So this certainly indicates the optimism of emerging markets and a potential change in global business and advertising."
Asked what single recommendation they would make to their clients to improve their prospects of marketing success over the next twelve months, ceo responses included:
As to how their respective economies will fare in 2009, a majority of responding ceos worldwide believe that conditions will stay the same (38%) or improve (39%).
- Embrace digital media 100%;
- Invest in global diversification;
- Be more integrated in all your marketing activities;
- And execute research and focus on compelling product benefits.
In North America, 38% of ceos predicted their local economies would improve next year, and only 10% t
Data sourced from AdAge.com; additional content by WARC staff