US marketers planning further spending cuts

08 February 2010

NEW YORK: A majority of marketers in the US are planning to make further reductions to their media budgets, according to a study by the Association of National Advertisers.

The industry body surveyed more than 140 client-side marketers in January this year, and found that 83% of respondents are currently attempting to identify areas where cost savings can be made.

While this marks a decrease compared with the total of 87% recorded in a similar poll six months ago, the ANA suggested a "new normal" may have emerged that could remain in place even when the recession has ended.

Overall, 41% of the organisation's panel plan to trim their marketing budgets by between 1% and 5%, with 70% pegging this figure in the 1% to 10% range, and 7% slashing their spending by more than a fifth.

Three-quarters of the sample were challenging their agencies to reduce internal expenses or find other ways to lower costs, with the same number providing less in-house funding for travel and expenses.

Some 53% were directing fewer resources to formal advertising and media activities, with 50% placing tighter restrictions on the finance made available for the production process.

A further 35% of clients were hoping to secure more favourable remuneration terms with their agencies, while 24% were investing less in research.

Over the last six months, 46% of this group had seen their budgets decrease, while 17% enjoyed an increase, and the situation remained unchanged for 34% of contributors.

Looking forward the same period of time, 59% of participants believed their expenditure would stay constant, with 22% predicting a drop, and 19% were optimistic that they would see an improvement.

"The recession may be officially over, but it appears that marketers have reset their expectations and a greater degree of frugality has set in," the ANA argued. "However, the deepest cuts are likely to have already been made."

Data sourced from ANA; additional content by Warc staff