Spirits escape the credit crunch

Despite forecasts of an impending economic slump, The Chartered Institute of Marketing’s latest Marketing Trends survey reveals that marketers believe their futures need not reflect the bleak view

Marketers remain surprisingly upbeat about their own prospects even if they are increasingly gloomy about the UK’s economic outlook, according to the Chartered Institute of Marketing in its latest Marketing Trends survey.

The number of marketers who expect general economic conditions to worsen over the next 12 months has risen substantially since September, from 40% to 57%, although 12% think conditions will improve. The gulf between those with opposing views is the widest since 2002.

More than a third of marketers believe the UK will fall into recession in 2008. Such pessimism is not universal, with 29% of marketers believing the UK will manage to avoid it.

Marketers remain optimistic about their own organisation’s performance, with 39% still believing that business will improve over the next 12 months (down significantly from 56% in September 2007), 41% believing it will stay the same and 17% expecting conditions to worsen.

The economic slowdown appears to be having an impact on expectations of marketers’ own organisation’s annual sales performance for this financial year, which have fallen from an average increase of 8.8% this time last year to 6.2%. However, the fact that marketers are still expecting to see growth of more than 6% indicates that they remain remarkably bullish.

Such confidence is reflected in expectations about job prospects over the current sales year. Just under a third of marketers expect to be adding staff, with only one in ten forseeing a decrease in the size of their organisation’s marketing function.

Significantly, marketing spend has also risen since September 2007, accounting for an average of 7.7% of an organisation’s turnover (up from 6.6% in the last survey). Advertising continues to absorb more of the budget, excluding salaries, than any other activity at 15%, closely followed by field marketing, public relations, lead generation, sales promotion and CRM, all on 12%.

Interestingly, a generational divide appears in attitudes towards online marketing and digital media. Marketers under 45 believe spending in this area will grow while those over 45 anticipate reduced spending. When asked about Web 2.0 and user-generated content, 38% felt it was relevant to their organisations, and just over a fifth said it wasn’t.

The survey also assessed marketers’ beliefs about the status of their profession. For almost three-quarters of marketers there is a large gap between the reality of the positive benefits marketing brings and how it is perceived by other parts of the business. A disturbingly high 45% felt most of their colleagues did not understand marketing’s contribution to the organisation’s objectives.

Perhaps in light of this, only 57% think that marketing is seen as a high priority within their organisation’s business strategy. This suggests that although many businesses are now recognising marketing’s strategic role, substantial numbers still fail to see its relevance at a strategic level.

Sustainability is another issue likely to have a significant impact over the coming years. Two-thirds of respondents believe that a company’s sustainability practices affect customers’ buying decisions, up from the last couple of surveys, but still below the peak of 76% seen in September 2006. That said, the number of marketers who strongly believe this to be the case has risen to 17%.

However, marketers remain sceptical about the durability of customers’ commitment to sustainability when the going gets tough. Just over half agree that sustainability will drop down consumers’ concerns in an economic downturn, with less than a quarter disagreeing.

When it comes to the 2012 London Olympics, almost four-fifths of respondents believe the Games will have a positive impact on the economy, with almost a fifth saying the positive impact would be very significant . However, those in the North of England and Scotland were less positive about the benefits for UK companies.

More than three-quarters of marketers believe that the Olympics will generate a positive perception of the UK around the world, which should help boost tourism and leisure industries for years to come, as happened in Barcelona and Sydney.

As in previous CIM surveys, around two-fifths of working marketers say it is “likely” that their organisation will undertake some marketing activities connected to the Olympics,. This figure rose substantially to 57% for those working for organisations with a turnover of £100m or more.

More welcome for the Government will be the fact that half of the those surveyed felt that the London Olympics was a good investment of taxpayers’ money.

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David%20Thorp%2C%20CIMMarketers appear to be in two minds about the economy. It is clear that many are bracing themselves for challenging times ahead but, surprisingly, this is yet to translate through to a personal level. Whether such faith in their organisation’s ability to prosper in an economic slowdown is well founded, only time will tell.

Whatever the future holds, those professional marketers who continue to research their markets and customers, who monitor and measure the effectiveness of their activities and who target their resources accordingly, will be best able to demonstrate the value they create for their organisations.

As the “nice” decade ends, marketers needn’t panic. Indeed, in tougher times, new opportunities often arise. Professional marketers can help ensure that their organisations make the most of these opportunities and exploit their competitors’ weaknesses to not only survive but thrive in such times. Marketers should seize the opportunity to demonstrate their worth and prove that every cloud has a silver lining.

David Thorp, Civil director of research and information

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