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77% of Marketers are Reducing Media Budgets

by Regis Hadiaris

Advertising Age is reporting the impact of this recession on marketing, from a survey by the Association of National Advertisers (ANA).  The survey shows that 77% of marketers surveyed plan to reduce their advertising campaigns’ media budgets.  The survey participants are comprised of 144 marketers across a variety of industries.

Most interesting were the “next steps” marketers plan to take, specifically:

  • 72% of marketers plan to reduce production budgets. If media spend is lower, conventional wisdom says that you would spend less time on ad production.
  • 68% plan to “challenge” agencies to reduce internal expenses. Many agencies carry high fixed costs (mostly salaries) and pass those costs on to their clients.
  • 48% are looking to reduce agency compensation. If the client is negatively impacted by the recession, it’s only a matter of time before that impact trickles down to the agency’s compensation.

While this conventional wisdom focuses on reacting to constraints, effective marketers know that unconventional thinking in this environment creates new opportunities.  Ideas these marketers use include:

  • Shift offline media spend to online. Buying online media with offline dollars can generate an overall budget savings and produce a higher ROI at the same time.
  • Invest in online production. Developing and testing new online ad creative and landing pages can help marketers get more results from less spend.
  • Change the agency model. Working with agencies that match their internal resources to their clients’ needs are more agile and less costly.

Regis Hadiaris is an award-winning Internet marketer and experienced leader known for unconventional ideas and impressive results.  His blog, Dot Connector, is a popular destination for personal development.

  • http://www.federatedmedia.net Matthew DiPietro

    Great thoughts here. I’d go a step further with regard to “Developing and testing new online ad creative and landing pages.” While ad creative needs a serious kick in the pants across the entire industry, I’d say marketers also need to step outside of the “ad creative and landing pages” mindset and begin to explore more integrated executions with the online communities that encompass their customer demographics.

  • http://www.mrwebguru.com Robert Wright

    Interesting article. I read it twice. So let me get this right, “plans to reduce” is good for us SEO’s right? I’ve always felt that a national economic recession is not a bad thing for Internet marketers.

  • http://www.newhomessection.com/blog Jayson

    I thought you were supposed to increase marketing budgets during a recession? (shucks)

    77% is a lot more than I would have guessed. Hopefully, the marketers surveyed don’t represent the entire market. It looks like they’re cutting costs in the right places and I think it’s a good idea to ask agencies to feel the pain too – group suffering always works out better.

    Your comment about shifting offline media, online is what I’d imagine most people doing. Offline mediums are too expensive and they don’t offer the tracking abilities that online mediums do.

    Jayson’s last blog post..Senate Passes Economic Stimulus Plan – $15,000 tax Credit for Homebuyers Still In

  • http://www.gadgets4nowt.co.uk PS3

    Why do we see so many headlines that simply state the obvious. Is it really that surprising that budgets are being cut in the current economic climate?

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  • http://www.yellowseo.com Yellow SEO

    We have seen an increase in SEO requests firm major organizations looking to slim down there marketing budgets during a recession and concentrate on organic placement. I also always thought marketing budgets where increased during a recession?