By Bill Duggan
In July/August ANA surveyed our members to determine how marketing and advertising budgets were being impacted by the economy. This survey, which was also done six months ago as well as a year ago, has become known as the ANA “Recession Survey”. (I look forward to someday having a survey called the ANA “Economic Boom Survey”!)
The news continues to be a bit grim. 87 percent of respondents indicate they are being challenged to reduce their costs and spending in light of the economy. That’s the same as a year ago, and only slightly improved from 93 percent six months ago. The top four ways marketers are reducing costs and spending remain the same.
- 81 percent are reducing departmental travel and expenses
- 74 percent are reducing advertising media budgets
- 71 percent are challenging agencies to reduce internal expenses and/or identify cost reductions
- 64 percent are reducing advertising production budgets
Reducing agency compensation continues to gain greater consideration by marketers. 56 percent are planning to do this today, versus 48 percent six months ago and 32 percent a year ago. This is a topic that we will explore more in ANA committee meetings in the fall—is there really still room to reduce compensation and what are the tradeoffs of that?
A positive note is that fewer marketers are eliminating/delaying new projects compared with past surveys—53 percent in the most recent survey versus 58 percent six months ago and 61 percent a year ago.
Looking ahead, marketers remain cautious about their future budgets. 17 percent are hopeful that their budgets will increase while 39 percent think that they will see reductions and 44% think they will remain the same.
The recession may be over according to some economic analysts. But it appears that marketers have “reset” their expectations and a greater degree of frugality could be the new normal. Full results are at www.ana.net/recessionsurvey3