Sometimes it seems the state of the economy is the only news being reported on these days, and maybe that's no surprise... considering the fundamental challenges that businesses have been facing.
Too often, senior management singles out the marketing department for immediate cuts as companies try to survive the economic downturn. But it is also worth noting that some savvy companies understand that marketing is an investment, not just an expense. That is, they understand that reductions in marketing spend may prolong stagnation or cause permanent loss of market share or profitability, even as the economy improves.
That said, what are marketers' view of how the turbulent environment will impact marketing plans and projections?
Two-thirds (68%) of marketers surveyed not surprisingly say the economic crisis will have a negative impact on their business, according to MarketingProfs research. Marketers in large organizations are more likely to think so (75%) than those in medium (70%) or small (65%) businesses.
Most marketers have been planning for spending reductions on traditional marketing vehicles and tactics, and are increasing the importance of online marketing in their projected budgets, according to the study. Marketers who have a pessimistic outlook are more likely to report that they expect to increase spending on online tactics and decrease spending on more traditional ones.
Whether you're a pessimist or optimist, what's certain is that the economic downturn has the potential to create an opportunity for savvy businesses. When your competition cuts spending, there will be potential to gain a competitive advantage. So now's a good time to carefully consider budgets, the marketing mix, and allocations in order to capitalize on the opportunity to snag a greater share of voice via various marketing channels.
Digital marketing may provide an opportunity to stretch marketing budgets. Those marketers who can best position themselves in relation to the competition and can capitalize on creative and innovative use of online marketing tactics may be able to reap the greatest return on the shift in allocation.
The bottom line: Keep various tools in your marketing arsenal, and don't become too heavily focused or reliant on any one tactic or media. Each tool can have a payoff for organizations that use it effectively to target the needs and benefits sought by the target audiences. Just be sure to measure results over time, or you'll have no idea which vehicles are most effective for which purpose.
Below, some additional findings from the MarketingProfs study:
- Some 30% of all marketers say they had made spending cuts as of late last year. The proportion was higher—43%—in the case of marketers in large companies. Moreover, about a quarter of marketers had already made budget reallocations.
- A quarter also predicted that they would have to make cuts in marketing spend this year, wile one-third anticipated their 2009 budgets would remain steady, albeit spending would be reallocated.
- B2C and product marketing/manufacturing companies indicated a greater likelihood to make future budget cuts or reallocations than either B2B organizations or those with a service-marketing orientation.
- Marketers are split about the foreseeable duration of the current economic climate, with nearly half (47%) saying they believe it will continue through all or most of 2009; 25% saying it will last into 2010 or beyond; and 22% saying the downturn would reverse by the middle of 2009.
- Although some might accuse the media of exaggerating the direness of the economy, most marketers (71%) report that the effects on their industry have not been exaggerated.
- Most marketers (77%) do not anticipate staff layoffs, with B2B marketers being somewhat more likely to anticipate staff layoffs than those in a B2C environment.
Photo credit: Rosa y Dani