SHOUT LOUDER DESPITE THE CUTBACKS
14th January, 2008
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The quarterly Bellwether report, which measures marketing spend, has been released and it paints a gloomy picture of the end of 2007, with a slightly brighter 2008. Indeed, marketing spend fell by more in the last quarter of 2007 than any time in nearly two years. However, it also shows that almost half of all companies plan to spend more on marketing in 2008 than in 2007.
But is this likely to make much difference to you and I? Marketeers and PROs in technology and engineering companies may not find their budgets rocketing up in 2008 quite so quickly. You see, much of the planned marketing spend reported by the Bellweather Report can be accounted for by the forthcoming Olympic Games and European football Cup. The sponsorship for these events is phenomenal and dwarfs most budgets. I wonder how the figures would look without these factors.
I would certainly expect it to be lower than the last quarter of 2008. However, there is also real danger of the economy talking itself into recession. This is particularly true of the element of our economy made up of marketing revenues. Our budgets are often the first to be cut in recession, despite the fact that they should be near the bottom of the list of spending decreases. You can only reap in sales next year the seeds that you sow in marking this year.
The Bellwether Report author, Chris Williamson, said: "Some positive news was provided by 2008 marketing budgets being set higher than actual spend in 2007, but we interpret this with caution." The Bellwether Report is compiled quarterly by NTC Economics on behalf of the Institute of Practitioners in Advertising.
The report for the fourth quarter of 2007 showed that budgets were revised down for the first time in a year, and that it was the steepest decline for nearly two years. It blamed weaker-than-expected sales revenues, disappointment profits and concerns about the economic environment.
Main media advertising, which includes television, press, radio, posters and cinema, was hit by downward revisions to budgets in the fourth quarter of 2007 -- the biggest since spring 2006. All other marketing, which includes direct and sales promotion, also saw an above average cut. Even internet advertising, which has been a powerhouse of growth, is showing the weakest rises in budgets since the autumn of 2003.
My own conclusion is that if you are operating below the level of cinema advertising and the Olympic Games, like most tech and engineering PRs are, things are going to get tight. As a result, you may have to work harder and make your marketing budget work harder. But don’t cut it. Come out fighting or they may be no fight left in you by next year.