Zero-based budgeting is being mismanaged by advertisers
TrinityP3 USA chairman Michael Farmer argues that advertisers are using zero-based budgeting as an excuse to dramatically cut costs, instead of fully understanding the practice’s innocent intentions.
WPP points the finger at ZBB as the most important factor driving cuts in WPP’s agency revenues — cuts that have taken 35% off WPP’s share price from its 2017 high.
Leading industry analyst Brian Wieser identifies ZBB as a major factor suppressing holding company organic growth, along with other factors like increased contract scrutiny.
“We do not hear much from CMOs today about their vigorous plans to get brands moving again. All we hear about are their budget cuts and agency changes under the ZBB banner.”
I think Michael must live in a parallel universe (perhaps what the US is these days?)