2009 marketing budgets potx

in the face of an economic downturntheir marketing budgets for the upcoming year economic outlook for 2009 and its impact on marketing budgets mayraruiz.com email marketing & web desig

in the face of an economic downturn

their marketing budgets for the upcoming year

economic outlook for 2009

and its impact on

marketing budgets

mayraruiz.com email marketing & web design

public relations & outreach branding & collateral presentations

training speaking writing promotion

marketingmisfit.com

This e-book highlights the marketing budget trends for

2009 as shared by leading marketing blogs and web sites No matter what you may do with your marketing

budget for the new year, it’s always a good idea to take a macro-view of the marketing climate at large to learn what other industries and marketing executives plan for their

2009 marketing expenditures

NOVEMBER / DECEMBER 2008

or the last couple of months, in my Letters from the Editor column, I’ve in one way or

another touched on a reality facing many marketing managers and executives: marketing

budgets for 2009 will be impacted in some way, shape or form How these budgets are

impacted is the primary focus of this e-book dedicated to sharing the collective insight and trends from various leading marketing blogs, online publications and thought leaders in the marketing space

f

Before diving into this subject, however, it should be noted that there is a difference in

perception when it comes to marketing budgets Some managers see marketing as an expense; others passionately argue that any marketing “expense” is really an investment in positioning and promoting your business

So states John Williams, a Senior Finance Executive with international and public company

experience and a partner at B2B CFO in Norfolk, Virginia: “Cutting back advertising only means that you believe the funds you expend there are not effective If that is the case, why were you wasting that money in good times?”

Economic gloom is so pervasive these days…

Ahhh if only these were good times As we are all too clearly aware, today’s times lean more

heavily on the bad side as of late Turn on any television or radio and visit just about any news Web site and you won’t be able to escape today’s grim economic realities At the time of this

writing, one quick glance at MSNBC.com’s main “Stocks & Economy” section’s headlines

underscores the gravity of our nation’s sour economic climate:

• Oil slips below $57 on global pessimism

• Economy strikes America’s richest university

• U.S unveils $40 billion in aid to AIG

• Starbucks profit plummets by 97 percent

• NYT: Emanuel urges aid for auto industry

• Fannie Mae posts $29 billion quarterly loss

I could go on, but somehow, I think you get the picture And so do your bosses and senior

managers And whether you agree with it or not, marketing budgets are one of several targets to

be affected in some way, shape or form given the economic outlook for 2009

The direction, implications and consequences of such an impact have been the topic of hot

discussion on many marketing blogs, web sites and industry publications recently and with good reason: it’s a highly relevant subject many marketers have to face or work through as their

employers navigate today’s choppy economic waters

Forget 2009 resolutions How about 2009 economic predictions?

Cory Treffiletti of MediaPost recently predicted the coming year will bring about some stability, not growth—and the stability, he states, will allow many businesses the time to examine where they are, create efficiencies and increase productivity Cory’s specific 2009 outlook is as follows:

Q1 revenue is going to be bad, but Q2 and Q3 will be stronger—with not more than 9% to 10% growth

Cory further believes that consumers will be “tight-fisted for the holidays and will build stricter budgets going into next year.” He adds, “Come spring and summer, assuming that oil prices have stayed stable and housing prices have not dropped more, then consumers may live a little once again Q2 and Q3 will be better than they look, probably coming in line with the 9% to 10%

growth that many online analysts are predicting, certainly not much more than that Q4 of 2009

is the real question in my eyes, as that is just too far away to predict accurately.”

Whether Cory’s predictions come true or not, the effort to somehow attempt to foresee what

2009 has in store is insightful for marketers as it helps steer our marketing direction, which

Other studies, however, are not as optimistic about 2009 An October 2008 survey by Marketing

the following:

• The majority (52%) of marketers are already making changes to plans and budgets as a result of the economic crisis with 65% of marketers expecting negative effects on

marketing overall

• Whether the market continues to fluctuate or falls into a recession, 75% of marketers

surveyed expect the impact of the crisis will extend through 2009 and into 2010

• Online marketing is turning into a venue where marketers can stretch their dollar while accurately targeting leads and customers 60% of all marketers surveyed stressed that

they would be increasing their online budgets while 85% would be reducing their use of traditional marketing vehicles

Objective data and analysis of this type can be helpful to any company or business trying to

better align its promotional efforts with what other businesses are doing in response to today’s down markets

Now let’s examine some of the recent marketing budget trends on the horizon which have

surfaced recently in response to the economic chaos challenging the very core of business all

around the world Doing so will help us to better understand the various different perspectives, influences and drivers challenging marketers even as you read this sentence

he question above was recently asked on the popular professional social network LinkedIn Seems like everyone is asking similar marketing budget questions For marketers

everywhere, this is a highly relevant question yet only two people responded to Reggie’s

inquiry Of the two individuals who responded, the responses were fairly consistent with most of the 2009 marketing budget trend information available on the Internet:

t

• Terry Dolan, Manager of Corporate Business Development at AG Salesworks,

shares that his company’s current and potential clients are under a microscope to

demonstrate ROI in Q1 '09 like never before “I think you'll see a lot less traditional

spending (mailers, shows, branding efforts ) versus highly trackable and highly targeted lead generation programs (cold calling campaigns, email).”

• Sarah Clachar, owner at Sarah Clachar Health Copywriting, agrees with Terry and

believes there will be more focus on direct response and fine tuning according to test

results Like Terry, Sarah sees more emphasis on developing web-based marketing due to

Terry and Sarah, like many others in the marketing space, are aware of the marketing budget

shifts and trends taking place in today’s business climates due to the economic recession As we try to explore some of these trends in more detail, please be aware that the marketing budget

trends being shared here are (a) hardly all inclusive of every industry and (b) not unique to one specific industry or line of business

As in fashion, there isn’t one trend that is “right” or represents the “best” marketing direction

Ultimately, what an organization does with its marketing budget for any year, in good or bad

economic times, is highly dependent on its own programs, goals and objectives, customers and market segment Still, it’s good to know what marketing budget trends are in play to help guide your 2009 marketing decision-making in the right direction

Not everyone plans to cut marketing budgets

While some organizations, as the MarketingProfs findings indicate, plan on shaving back their marketing expenditures as a traditional response to a downturn in the economy, not all industries

or businesses agree with the scaling back response In fact, some of the biggest names in

branding, (including Procter and Gamble, who survived the crash of the 1930s) are suggesting marketers at all levels do just the opposite and are even going as far as encouraging companies to stay on track, but use dollars carefully

As Diane Wieland of Duo Consulting’s blog shared in an October 28, 2008 post entitled, “Don’t

cut that marketing budget yet,” several head marketers for big brand companies were sharing

their “market onward, market stronger” positions at the recent annual Association of National

Advertisers conference Stuart Elliott at the New York Times shared some of the more memorable

quotes by head marketers for companies like Hewlett-Packard, Coca-Cola, and General Mills

Hewlett-Packards senior vice president and chief marketing officer Michael Mendenhall had one

of such quotes:

“It’s incredibly important to be risk-takers in the economic climate we’re in

People have a tendency to pull back In economic times like these, you don’t

hunker down and go in the bunker.”

Wieland also highlights the marketing tenacity of companies such as Coca-Cola, reported to have the strongest brand recognition in the world, who refuse to retreat and cut back Joseph V

Tripodi, chief marketing and commercial officer for Coca-Cola was quoted as saying:

“Don’t go to the ledge Don’t let the urgent overwhelm the important It’s very

easy now to panic, and we cannot panic.” He added, “Invest in your brands now,

especially in these dry times The easiest thing is to shut down, and that’s the

worst thing.”

Brand recognition is one thing, but getting consumers to buy is another General Mills is fending off the economic downturn with a new “Home is calling” campaign

“Right now, given where America is, people need to go back to the comfort of

home,” said Mark Addicks, senior vice president and chief marketing officer at

General Mills So a new campaign for the company’s Pillsbury brand will carry

the theme “Home is calling.”

Other industry sectors to avoid marketing cutbacks

In a just-released survey from eMetrics Marketing Optimization Summit, more than 64% of

respondents say the current economy probably won’t affect their overall marketing budgets, but most report plans to Increase or maintain their budgets for:

• Email (83.6%)

• Online Advertising (77.2%)

• Keyword Search Campaigns (75.5%)

• Social Media (61.8%)

• …and Video Advertising (38.2%)

Many other industries and service providers from diverse professional tracks also believe

marketing cutbacks are counterproductive in down markets Curtis Linder from Linder Legal

article published in the Chicago Daily Law Bulletin The article refers to a special advisory

published by law consulting firm Hildebrandt in which it reports that “among actions law firm management should take immediately, Hildebrandt advises (among other things): continue law firm marketing.”

And Glen Miracle of NVS Kitchen & Bath in Manassas, Virginia says one expense that will

change for sure will be his firm’s marketing budget “We will be forced to spend more of our

resources attracting new clients The more potential clients you can sit in front of to tell your

story to, the more opportunities to sell them on your company.”

Most marketing departments will have to market with less

Despite the marketing budget cut defiance some industries and organizations courageously

display as their response to the recessionary economy, it does appear a large preponderance of marketing departments will have to market with less

A December 2, 2008 survey by MarketingSherpa finds that some of the specific areas where

marketing budget cuts will be most felt are in the following:

• Less trade show attendance which result in less travel and less sponsorships

• Renegotiating third-party contracts; reevaluating vendor contracts due to price pressures

• Virtual training (e.g www.lynda.com) will replace expensive, extended off-site training

• Reduced marketing staff for reduced overhead

More trend details

A recent e-Marketer study dated December 16, 2008 highlights many other notable marketing

expenditure trends and predictions for 2009 Not surprisingly, the first on the list is the increase

of online advertising spending for the coming year Some of e-Marketer’s Senior Analyst David Hallerman’s findings include:

• Video ad spending will run counter to overall economic developments, rising by 45%

in 2009 to reach $850 million Two key factors support this trend:

o First, the sharp escalation of professional video content on the Web—mainly from

TV networks—is creating a viable base for brand marketers

o Second, even though most advertisers are increasingly cautious with their

budgets, they still need to reach online audiences and woo their shrinking wallets with messages that reach their hearts and minds—hence, more video

• Search marketing spending will grow by 14.9% in 2009, to $12.3 billion

Search marketing is not recession-proof, but it is recession-resistant Two basic

assumptions support this eMarketer projection:

o Search is highly measurable, so it will maintain its place in many budgets and

increase in some others, as advertisers look for secure and effective methods to combat fear in an economic meltdown

o Also, consumers—who monetize search ads by deciding whether or not to click— will take money off the table by shopping less, and put money back on by

searching for deals Although search advertising will grow less in 2009 than in any previous year, its inherent strength will mean greater spending gains than for any other major form of advertising, whether online or offline

To cut or not to cut, that is the question

Ultimately, most marketing budgets for 2009 will either be cut back or have their dollars shifted more than likely towards digital marketing The December 16, 2008 marketing study cited above indicates that traditional marketing will continue “to hurt” with newspaper advertising declining

in the new year more than any other medium eMarketer also estimates that US TV ad spending will decline 4.2% to $66.9 billion in 2009 This drop in spending reflects not only expectations

of a continued poor economy but a seismic shift in the way TV ads are bought and sold

However your shift, reduce or transform your marketing budgets for 2009, one fact is beyond

clear: marketers will need to squeeze more ROI from marketing expenditures than ever before

f there can be any silver lining to marketing budget reductions, it would be that generally we tend to be more creative when resources are limited When marketing budgets are plush, we marketers are creatively creative; meaning our creativity is more inspired than forced When marketing budgets are cut, however, our ability to be creative becomes more of a necessity and compels us to see what more can be achieved with less Ironically, marketing budget scarcity can often then result in unexpected resourcefulness

i

Adam Cahill, SVP and General Manager of Carat Boston and ClickZ.com columnist believes

that reduced marketing budgets may be a blessing in disguise “The marketing with the biggest impact can't actually be bought anyhow, so it's still within your reach.”

These times of marketing budget scrutiny, right or wrong, are perfect for “spring cleaning” and making the time to truly reevaluate every marketing dollar being invested, no matter how large

or small that expenditure A few questions to consider as you rework your 2009 marketing

dollars include:

• What marketing programs or campaigns have not resulted in solid, measurable ROI?

• What marketing programs or campaigns can be further combined or integrated?

• What soft-ROI marketing activities get to stay and which ones do not?

• Where can sales and marketing collaborate even further?

• What new analytics, metrics or measurements tool(s) can provide better insight into our marketing operations?

• What are our marketing partners/agencies doing for us that we can’t do in-house?

• What marketing functions or tasks are we doing in-house that would be far more

cost-effective to outsource?

• What communications can make the successful shift towards (more) digital?

If your organization, non-profit or small business needs assistance with developing out-of-the-box publicity programs and marketing campaigns, I can help With more than 14 years of experience in developing marketing programs, managing brands and generating publicity for clients in diverse industries, I can provide objective, outside-looking-in perspective which can often be the refreshing kick-start your publicity needs!

Contact me today at mayra@mayraruiz.com and let me know how I can be of service

Did you know?

I am presently authoring several books covering a variety of marketing and publicity topics; the first book

is scheduled to debut in 2009!

Want to be notified when any of my books, e-books or special reports (like this one) become available?

Sign up to receive my e-newsletter to stay ahead

on all my publishing

Thank you for visiting my site and downloading this resource Please feel free to share it with others who may benefit from this information

Mayra Ruiz-McPherson

the marketing misfit

www.mayraruiz.com