US marketers adjust to a "new normal"

03 April 2013

NEW YORK: Marketers are continuing to look for cost savings and reduce their budgets even though economic conditions are improving, a poll of major brand owners has shown.

The Association of National Advertisers (ANA), the trade body, polled 120 client-side marketers in January 2013 for the latest edition of its ANA Recession Survey and identified a "new normal" where budgets remained under pressure despite an improving economy.

"The 'new normal' for marketers is an environment that challenges brands to grow earnings through improved marketing effectiveness and increased spending efficiencies to cut costs," said Bob Liodice, ANA's president and CEO.

"Companies expect technology, expanding media platforms and better decision making to better enable marketers to pursue earnings growth objectives," he added.

Some 82% of marketers were looking at productivity savings, with two-thirds of those planning to cut their budgets by up to 10% this year.

Cost reduction will be focused on four main areas, including travel, targeted by 58%, internal agency expenses (55%), advertising campaign media budgets (46%) and new projects (44%).

While internal agency expenses are a target for over half those surveyed, agency compensation is in the crosshairs of only 15%.

"It's possible that many marketers have reduced agency compensation as low as possible and now instead are challenging their agencies to reduce costs internally or identify cost reductions ... which could indirectly lower agency compensation," the report said.

Overall, 44% of respondents reported their budgets had decreased over the past six months, and 56% expected their budgets to stay the same over the next six months.

Warc's Global Marketing Index from January, based on a1,225 responses, indicated that marketing budgets in the Americas had risen, a trend which continued in the following month before levelling off in March.

Data sourced from ANA, Advertising Age; additional content by Warc staff