Posted October 15, 2008 12:09 pm by with 14 comments

Tweet about this on TwitterShare on LinkedInShare on Google+Share on FacebookBuffer this page

MarketingProfs conducted a survey to see how the economy is affecting marketing decisions. How are companies responding? They asked 600 marketing professionals about their plans for the future.

When times are lean, businesses often cut their marketing budgets. The grim news is 65% of marketers expect negative effects on marketing overall. And they expect the affects will be long term – with 75% expecting it to last into 2010. Some predict layoffs (25%) and falling salaries (43%). 17% believe they will face both layoffs and a pay cut.

So what are marketers doing? They are moving from traditional advertising to online marketing. That’s what we’ve heard for a while, but now marketers are moving budgets to online even faster than before. According to MarketingProfs the majority are spending more online (though I think it should be even higher).

“MarketingProfs has observed that online marketing is also turning into a venue where marketers can stretch their dollar while accurately targeting leads and customers. 60% of all marketers surveyed stressed that they would be increasing their online budgets while 85% would be reducing their use of traditional marketing vehicles.”

Note that almost everyone said they were reducing their traditional marketing budget. That may be wise for some businesses, depending on the industry. However, cutting budgets may not be such a good idea for everyone. The last thing you want to do when people are uneasy, is to go silent or cut back on communication. You may need to adjust your messages but it may be a better idea to increase marketing rather than react by pulling back.

Here are some benefits to increasing or at least maintaining marketing campaigns in leaner times:

  • Since publishers are having a more difficult time selling ad space, there are more opportunities for bargains. You can pay less for prime advertising space.
  • If your competitors are slashing budgets while you hold or increase yours, you’re business is likely to come up on top when the recession ends. Want proof? Look at this history lesson.

I think this sums it up best:

Successful companies do not abandon their marketing strategies in a recession; they adapt them.”

I’m disgusted by the doom and gloom stories that make it seem like everyone is hurting because I don’t think it helps our mindset. There are many businesses that are thriving (including online marketing firms like OrangeSoda where I work).

I make it a point to ask clients how they are being affected. Most are positive. While parts of their business may be suffering, there are often other parts that are picking up. This creates a great opportunity to publicize what’s going well – a marketing opportunity to tell your story.

When things are going badly I want to hear success stories even more. So I wonder, how is your business adjusting? Are you cutting, holding steady, or increasing your marketing? Are you shifting your focus to online over traditional marketing?

  • I honestly think that he devil is in the details. I would expect that this study is focused on companies that have large pre-existing budgets to work with. This would make sense that they are able to shift focus while cutting back. I would like to know if this is true for smaller businesses. It seems that from the small business point of view they are cutting back everything because some are literally just trying to stay afloat.

    Joe Hall’s last blog post..Social Media Search Tools

  • Good news for SEO/Ms.

    Utah SEO Pro’s last blog post..Link Metrics for SEO

  • Yeah, well traditional marketers are clearly from the “older” generation; when I say that I mean they are 35 years old and up. This generation is not as computer savvy as the younger generation and is started to learn that in order to make the real bucks, you got to go online. There is no way around it. Plus, you can really cut marketing budget over 100 percent because the best marketers online can market for FREE! That’s right, no google adwords! Good post.

  • This is absolutely correct in that history has shown it is important to keep up marketing spend during tough times to weather the storm. Of course, if the money isn’t there, that makes it more difficult.

    That being said, shifting spend online, where it is more affordable, more targeted and easier to track is most certainly a wise decision.

  • Janet, I totally agree that the “doom and gloom” propaganda is appalling. Producers will do what we always do whether in up markets or down. We will produce!

    Clint Eagar’s last blog post..PayPal Frustrations

  • R&D aslo hurts during recession times… Our budget has been cut back for the next year as a direct result of the economic downturn.

    SoLinkable’s last blog post..FreeThisSchnizzle() – The Daily WTF

  • Pingback: Wanted: Marketing Manager To Work With Me At My NYC Start-Up | AttentionMax()

  • I’m so glad you pointed out that some are thriving – it needs to be said. There’s far too much doom+gloom.
    We’ve certainly found that most (if not all) of our clients have cut their budgets, but largely in print – and they are definitely a lot more willing than they had been to try some social media stuff instead at a fraction of the cost.

    Simon’s last blog post..Does Anybody Remember Laughter?

  • Pingback: G5 Search Marketing » Blog Archive » What’s Working: Online Advertising()

  • I hate marketers logic. When the market is tough, it’s time to increase marketing budgets but refocus on more cost effective forms of advertising. Stop gambling on risky formulas and use the mediums which present valuable data in realistic times but please, don’t *cut* budgets. That’s simply suicide by a thousand cuts.

    Christopher Ross’s last blog post..Blog Round Up – October 16th

  • Yeah, online marketing is growing by the time. Yup…

  • Pingback: Web Analytics: Time to Get on Board « Cup of Buzz()

  • Pingback: Fear and Marketing | The AIR Blog()

  • Pingback: This Week In Search Marketing Staffing - 10/20/08 | Onward Search()