NEW YORK There's more bad news on the horizon as marketers prepare to slash ad budgets and more closely scrutinize media expenditures, according to a new Association of National Advertisers survey issued today.
Fifty-three of the 100 ANA members polled expect to reduce their media budgets in the next six months as a result of the poor economy. And 87 percent said they've been asked to identify cost savings or reductions in current marketing and advertising efforts.
The survey was conducted earlier this summer and polled companies in industries including pharmaceuticals, financial services, consumer packaged goods, computers and technology and retail, among others.
Sixty-three percent of respondents said they would challenge agencies to reduce internal expenses or identify cost reductions. More than 60 percent also said marketing-related travel would be restricted and that new projects would be delayed or eliminated.
Of those already identifying cost savings, more than 50 percent said they believe their marketing budgets would be reduced to 10 percent. Twenty-seven percent thought their budgets would be reduced 11-20 percent, and 10 percent were envisioning cuts of more than 30 percent.
But ANA president Bob Liodice cautioned marketers to think twice before making drastic cuts in marketing. "Historically, marketing budgets are among the first to be cut in a budget crunch," he said. "In fact, spending more during tough times when competitors may be scaling back is a good way to strategically boost market share, because this often helps brands come out ahead when the economy rebounds."
"Effective marketing spending during economic downturns is not about how much you spend but how you spend it," said Liodice. "Marketers must assess how consumers and customer behavior can be positively influenced during tough times. If it can, then marketers should give increased consideration to more spending rather than cutting."