Economy over ecology

Social and environmental issues are still less important to most companies than financial results, despite consumer trends, but marketing departments are being seen as an increasingly vital asset.

The latest Chartered Institute of Marketing (CIM) Marketing Trends Survey reveals that the social and environmental impacts of an organisation’s activities are still not a major issue in most companies and that performance is still largely judged on financial results alone.

While more than two-thirds of marketers taking part in the survey say financial practices are very important in their organisation, less than a third say environmental practices are a major issue, and a similar number say that social practices are a key concern.

Larger companies are most likely to be “financially focused”. Over three-quarters of marketers in companies with a turnover of more than £51m say financial practices are “very important”.

But this does not mean the triple bottom line is being ignored. A significant 46% say social practices are “fairly important” and 42% said the same of environmental practices. While just under half (44%) of those questioned agree that their company’s financial bottom line is more important than any other considerations, exactly the same number disagreed.

Marketers are aware that “green” credentials will have a growing influence on consumer behaviour. More than three-quarters believe that a company’s sustainability practices will increasingly affect customers’ buying decisions, while less than one in ten disagree.

Marketers do not believe we will see much change in economic conditions in the UK over the next 12 months. Over a quarter of respondents say the climate will improve – a slight increase on the spring survey, when only 19% predicted an improvement (MW April 13).

However, as with many previous surveys, marketers were far more bullish about their own prospects. Almost two-thirds believe their business will improve over the same period and only a quarter said it would stay the same.

Sales are expected to increase by an average of 8.4%. Marketers in Scotland and Northern Ireland are most optimistic about their future sales and marketers in both regions are predicting sales growth of over 9%. Those in Wales are the most gloomy and are expecting to add just 4.9% to their order books.

Companies are spending around 7.6% of their turnover on marketing and, once again, small companies are spending the most (8.6%). Consequently, marketers in larger organisations have the most difficulty over budget negotiations and 61% of those in companies turning over £100m or more say securing marketing budget is “difficult”.

The lion’s share of marketing money is still spent on advertising, which takes over 15% of the budget. Other activities in which marketers are investing heavily are field marketing (13%), sales promotion (12.4%) and customer relationship management (12.2%).

Looking to the future, online and digital marketing is the area in which marketing spend is increasing the fastest and marketers are preparing to raise budgets in this area by 2.7%. The smaller companies are embracing this activity most readily, with an expected increase of 3.2%.

Despite all the excitement over developments in digital communications, most marketers are still only talking the talk when it comes to entering this brave new world. While just under three-quarters (73%) say “not at all” when asked how often they use podcasts, 70% say the same when asked about corporate blogs, 68% never use mobile marketing and 61% never use viral marketing.

The Olympic Games are likely to spark a splurge in spending and 40% of marketers say they will undertake some marketing activity connected to London 2012. The excitement generated by the Olympics will be greater in the London area and this figure rises to 54% among companies in the South.

On the subject of jobs, a third of the companies questioned say they plan to increase the size of their marketing department, while 11% are preparing for cuts. This paints a slightly brighter picture than in the spring, when only 27% were planning to take on more staff and 13% were predicting job losses. However, employment prospects for marketers are still not as rosy as they were in the summer of 2004, when just under half (47%) of all marketing departments were growing.

The survey highlights a worrying trend – a continuing decline in the perceived importance of marketing. While over half (54%) say marketing is given a high priority in their company, this figure has fallen from 59% in the spring survey and 63% in the previous study of autumn 2005.

Yet again, smaller organisations are the most likely to value the contribution of marketing and it is seen as a key factor in a significant 72%, compared with just 49% of the largest organisations.

• For further details of the survey, contact Ray Jones at the Chartered Institute of Marketing. Email RayJones@cim.co.uk

Marketing Week has been asked to point out that there were several inaccuracies in last week’s Insight graphs. For the correct data, please visit www.marketingweek.co.uk/item/54181

Cash is still king and making money is still the main motivation in most businesses. But if we had asked organisations whether the environmental and social implications of their activities were of any consequence ten years ago, I would have been very surprised if they had been more than a peripheral concern for any but the most foresighted. Informed professional marketers recognise that “green” no longer means “grotty” and that corporate social responsibility (CSR) has moved into the mainstream. In the future, environmental and social performance will not just be a footnote on the marketing agenda – they will become a central focus for a profit contributing marketing strategy.
Geoff Hurst, marketing director, Chartered Institues of Marketing.

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