GROWTH – IN TOUGH TIMES

The past decade has truly been transformative for marketers. Technology has given us an expanding array of media alternatives including display and search advertising, mobile, digital outdoor, brand and company websites, podcasting, blogging, social networks and more. Supplemented by a resurgence in sponsorship and event marketing and public relations, marketers have an incredible arsenal that go well beyond what traditional television, radio and print have historically provided. And now, with a healthy devotion to marketing accountability, marketers have an increasing sense as to the return on their marketing investments and an opportunity to make better marketing and budgeting decisions.

 

So, what's wrong this picture? Well, with all of our progress, marketers are cutting budgets in the face of economic slowdown. In a recent ANA survey, 53% of marketers polled say they will be reducing budgets during the next six months. While this is not surprising, it is very disappointing. Every marketer worth his salt knows that marketing builds brands. And strong brands have empirically performed better in the short and long term. According to a 1998 PIMS study, companies that increased marketing spend during a recession achieved an average return on capital employed of 4.3% compared to 0.6% for those that maintained marketing spend and -0.8 % for those that cut. In the face of this data, many marketers are making the wrong decision by retrenching instead of increasing investments.

 

Some marketers have, in fact, paid attention to fundamentals. And those marketers are the ones that are likely to succeed. They are the ones that are most committed to achieving "growth". At ANA’s upcoming 2008 Masters of Marketing Conference, we will showcase brands that have decided to invest in their business and build new platforms for growth. Such companies include American Express, Hewlett Packard, Nike, e-Trade, Zappos.com and many more. These companies determined that continued investment in solid fundamental brand building principles was the only path to short and long-term success. And they have been rewarded and will continue to be rewarded regardless of challenging economic conditions or the aggressiveness of competitors.

 

That is why the data from the ANA survey is so disappointing. One would have hoped that CEO’s, CFO’s and CMO’s would have come to the realization that the path to growth is through sustained investment – and not through cutting and trimming and slicing and dicing. What this means, in the end, is that we have a lot more work to do to build brand championship in all corners of the corporation. More to come.