Tactical changes for recession

While most marketers anticipate budget cuts and changes to how spend will be allocated, the majority regard a recession a time for brands to shine, and marketers to prove the worth of their strategies

Credit crunch anxiety is making UK marketers feel under increasing strain to prove their worth. The vast majority of UK marketers feel they are under greater pressure to demonstrate their strategies are working, as they tackle marketing their brands in a recession. Almost three-quarters (71%) of UK marketers surveyed in the latest Marketing Week YouGov poll said they felt more pressurised than usual to demonstrate the impact of every marketing activity.

Gloom is widespread and optimism is in short supply as the survey reveals that more than three-quarters (77%) think the credit crunch has had a negative effect on the marketing industry as a whole and more than two-thirds (67%) think the recession will last between one and three years.

On a brighter note, marketers display a degree of confidence in their own companies: many think they will fare better than the industry sector as a whole. About two-thirds (67%) rate the financial prospects of the whole industry worse compared with three months ago, but only 38% rate the prospects of their own company as worse, and 43% see the prospects of their own company as being the same as they were three months ago. Nevertheless, there is plenty of anxiety in the air: 62% believe the nature of the current crisis in the international financial system will have consequences for their business, beyond triggering a recession.

While fearful for the prospects of their respective industries, on a more hopeful note, 57% said the economic climate had not had a negative effect on their own careers. Yet almost a third (31%) think their company is likely to make structural changes to its marketing operations as a result of financial constraints.

A similar number foresee a consolidation or restructuring of both the sales and marketing teams within their organisations. And while only 10% say there has already been a substantial lay-off within their marketing team, more job losses may be on the cards as 12% say there are plans to move creative work in-house.

Perhaps drawing on their experience of previous recessions, from which some brands emerged in better health, some marketers see a downturn as an opportunity to shine, with nearly two-thirds (65%) believing the recession might offer some market advantages for their brand.

The overwhelming majority (91%) say they believe in the principle that one of the most important things in a recession is to continue investing in brands. Yet 68% say their marketing budget has been hit by the financial gloom and will either be reduced or will not be increased for the next year.

As well as a large proportion anticipating less or no increase in funds to spend on marketing, many expect the division of spend between marketing activities to change in the coming year, with online, digital and direct marketing looking set to be the biggest winners.

Online spend is predicted to reap the benefits of changes with a budget increase anticipated by over half of those surveyed. More than a third (36%) predict their direct marketing spend will rise and 42% foresee their digital spend increasing. Marketers believe this trend within their own companies will be reflected across the entire industry as marketing budgets across all sectors feel the strain – 56% think online and 48% think direct marketing will take the lion’s share of the marketing business in 2009.

Marketers are divided over whether the economic climate is driving their above-the-line spend into below-the-line activities such as point-of-sale promotion and word-of-mouth, with 30% agreeing that it is. But 43% say this is not the case.

Television and newspapers look likely to be hit hardest: 21% say they believe they will cut TV spend and 26% think the same will be true for print and newspaper advertising. Magazines, too, are likely to feel the pinch as 29% foresee cutting their advertising spend in this area. Outdoor, radio and cinema advertising are set for similar falls, with 18% predicting budget cuts for outdoor and radio each, and 17% for cinema.

Reflecting the pressure marketers feel to prove their initiatives are working and perhaps the need to justify a particular strategy in the first place, 24% predict their spend on market research will rise, the same number believe investment in data will increase. Indeed, 42% of marketers believe they will make greater use of research to justify spend or monitor effectiveness.

Despite the growing pressure, most marketers (66%) think their company will allow them to continue investing in the brand, albeit with moderations in spending and under greater scrutiny.

As well as altering where their companies’ marketing activity appears, almost half (48%) are looking at changing their marketing messages in the coming 12 months.

Perhaps the move to alter messages echoes the feeling that frivolous advertising is becoming less appropriate as the country watches its banks fail, well-known businesses collapse and the number of jobless rise daily, with difficult financial circumstances inevitable for so many of the population. 




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