Marketers cutting costs and moving to short term planning
Advertisers are being forced by the economic climate to make far more short term decisions over their marketing budgets, research by selection firm The Agency Register suggests.
According to an analysis of international research, combined with surveys of local clients, The Agency Regsiter says it has come up with the following findings:
- 46% of clients are working on a “pay-as-you-go” basis, compared to just 31% who say they are still working to annual approved budgets;
- 85% predict “a significant decline” in budgets compared to last year
- 54% say they will see a decline of their budget of more than 20%
Peter McDonald, MD of The Agency Register, said: “Senior level marketing decision makers will be forced to consider budgets wisely.” He added that they would have to be “more contemplative” over hiring and outsourcing issues.
He said marketers were cutting costs around several areas:
- Departmental travel
- Media budgets
- Ad production budgets
- Agency recharges
- Agency compensation
- New projects
- Salary and hiring freezes
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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Hi there,
Is there a link to any of this research available?
Thanks,
Nick
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Sorry Nick, there isn’t – it’s based on a hard copy press release from the Agency Register. For what it’s worth, they’re at http://www.agencyreg.com.au.
Cheers,
Tim – Mumbrella
There has been a massive rush to Mobile marketing in the US, why? Because its rapidly deployed, inexpensive and fully measurable.
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A key point behind this discussion is that its easy to headline cuts. Even popular, in fact. Managers can appear all responsible and efficient – and be heros at those groovy accountants parties. But how do they know they cut the right bit? Or did they just destroy the main value-driver?
Being prepared with concrete ROI numbers means you have two critical things:
1. A defensible position and;
2. A risk management plan.
Because analysis drives planning and planning drives value. That sounds a bit more strategic!
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At Quantium we have had a big increase in projects recently, looking at precisely this issue. When the budget gets cut, which media spend can be reduced with the least effect on sales results? Clients are taking greater control of these decisions too, and asking the agency to simply administer their plans.
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This happened after 9/11 also. Media providers panic and offer ridiculous distressed rates, their competitors are forced to do likewise to maintain share, and advertisers are ‘educated’ to wait for deals.
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