How badly this financial crisis affect your marketing budget?
There are companies all over the world that, as a first measure on crisis, cut the marketing budget. I know that is absurd but I see this stupidity all over the world. My problem is that, even if you want to cut the advertising budget -which I agree-, marketing can be the savior not the expense they can cut first.
The companies should rely on new and bright marketing plans to overcome this crisis and yet they seem not to understand the meaning of marketing.
Did you faced the same problems? How had you handled this situation?
Good Answers (14)
Daniel S.
Head of P&G Digital at MediaCom Romania
Best Answers in: Direct Marketing (1), Web Development (1)
Madalin, I will not answer you directly to your question, since I don't know the exact answer right now :). However, I will share a piece of thought I wrote on my blog a while ago:
"Coaching and Exponential Marketing Aim For Performance
Wikipedia (citing various sources, of course) defines coaching as “a structured process-driven relationship between a trained professional coach and an individual or team which includes: assessment, examining values and motivation, setting measurable goals, defining focused action plans and using validated behavioural change tools and techniques to assist them to develop competencies and remove blocks to achieve valuable and sustainable changes in their professional and personal life.” If I were to summarize the above definition in one word, this would be performance.
Paul Garrison defines marketing’s purpose in his Exponential Marketing book as being to “sell more stuff, to more people, for more money, more often and more efficiently.” Paul describes the exponential marketing process as having the following steps: destination planning -> value diagnostics -> brand architecture -> fully integrated communications -> performance alignment. If I were to summarize the above definition in one word, this would be performance.
Both coaching and exponential marketing focus on performance. Mihai Stanescu was telling me that business/executive coaching is all about performance and not about reparatory therapy (and a lot of people have the perception that coaching is out there to solve problems not help achieve performance). Paul Garrison was telling his class of marketing students that he never had issues getting a marketing budget from his boss as long as he knew exactly what he wanted to achieve and he had the strategy and tools to achieve that business objective (he was not identifying problems that needed to be solved with that marketing budget, but rather business opportunities).
Ironically, most companies, in order to achieve performance or during a crisis, focus on cutting costs. Do you see a striking difference in these two approaches to doing business?"
So far the financial crisis has not affected in any way our marketing budget, however I think this is the right time to push forward with bolder strategies as well as innovation, and gain a competitive advantage- all of this fueled by a strong marketing presence.
We will need to think more deeply to efficency, we will need to learn to track the results and take decision based on facts. Proabably we will reconsider online campaigns (and i'm not talking about banners)
The crisis does affect my business, but that doesn't mean that it also affects my marketing budget. Because probably at least 90% of the money that go into marketing can be considered invested money (that generate more cashflow), not costs.
And in times of crisis, you cut costs, not your marketing department's budget. Because that department should be the one that brings you (at least) more money than it needs in order to exist.
The only change i made in the marketing dep. was to stop the marketing activities that were using the non-measurable 5-10% of the total marketing budget. I stopped them, and i am now looking for other marketing opportunities, which can deliver measurable results. So the money is still there, only that a few activities are being replaced with more-measurable ones.
Then again, i have a small company, with a pretty small marketing budget, compared to others. The interesting thing to watch in the next 12 months will be the way the big companies handle the crisis.
I thing that Tom Peters once joked about how you turn a big company into a small one. "Just wait" he said. :)
Josh C.
Director of Operations at Web Industries, and Decent Little League Coach
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Madalin,
Marketing sometimes does get cut, and it's not because we're all stupid. It is a fact that marketing is a discretionary spend, more so than payroll and rent.
That said, we are fortunate. We have not yet had to significantly reduce our marketing or advertising, but we are tightening up on how many people attend trade shows, and some of the print advertising may have to be delayed.
Josh.
I have to points-of-view on this, being both a provider and consumer of a number of marketing services.
From an internal, marketing my company point-of-view, we have increased our marketing dollars, but also channeled them into a more 1to1, direct marketing strategy. More variable data, personal touches rather than mass quantity and hoping.
What we've seen in our clients (and what we're pushing them to do) is generally the same. Being willing to go "skinny" in other departments to bring dollars into the marketing department, then channeling that money towards more direct, trackable (and measureable) services. What I've seen is that the people who cut their marketing budgets, in hopes of riding out the "recession" (whatever you'd like to call it)...are fading quickly, while the ones who took money from other departments are either growing despite the current economy, or at the very least, the bleeding has stopped.
Actually a "marketing budget" is a rather pretentious term for a small company like Comanescu. I'd rather say I've intensified my promotion activity via 2.0 channels. I've printed an offer related to one of my fields of activity and I've added some more meetings with potential customers in my iCal. So maybe the right answer would be that I've increased my "marketing budget" following the crisis.
What I can say is that people are quite open to discuss new ideas right now and every solid professional that I've met is slightly euphoric when talking about the crisis. I suppose it's a sincere attitude and it's related to the positive effects the crisis has on competition, especially in a very young economy like Romania's.
Jim G.
Direct & Social Media Marketing Agency CEO. My last client saw 100% plus year to year growth. Seeking 2 NEW CLIENTS!!
Best Answers in: Direct Marketing (5), Guerrilla Marketing (1)
The first casualty is the marking budget, which then becomes a self fulfilling prophesy.
Less marketing = less new and retained customers = less revenue = more budget cuts! (an on and on)
I've written some great (at least others tell me that) articles on how to market during a crisis, reduce costs vs. layoffs, how to be a superstar in this economy etc. Check them out...
Regards,
Jim Gilbert
Links:
Randall B.
Executive Producer Partnership Productions
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Madalin,
We have increased our ad spend by 20% in traditional media. We have increased our ad spend online by 100%. It has been proven for decades that companies that spend more in advertising in a down economy will be more robust than the competition.
We are careful where we place the funds, and we are on the leading edge of creating huge ROI for the spend, but overall we firmly believe that in a down economy you have to have more presence, not less, have more customer touchpoints, not less, and have more communication with customers. That way you will be in their "top of mind" when they are making a decision.
Now is the time to strike when your competition is sitting in a dark room frightened out of their wits and pulling ads. Many companies are literally "disappearing" from the public consciousness, don't let your be one fo them.
I am yours in success,
Randall
Hello,
If you ask me about opinion what will be going on in general then I am 100% sure that some budget will be cut. We already face the situation in couple of countries when our customers delay or cancel ad campaigns.
If you ask me what we are going to do as Gemius then I canonly say that we are going to pump even more money in the marketing next year, as I belive there are extraordinary chances for Internet companies to get stronger after crisis will cease.
Filip
Poate ca in perioada de criza se schimba paradigma. In perioada de boom targetul central al majoritatii organizatiilor este cota de piata, extinderea agresiva si, central, ancorarea in piata. Este perioada in care piata urla mesaje de "demand coping" iar organizatia, fiind in principiu pe val nu le asculta, fiind ocupata cu "supply challenge". In perioada de criza companiile tind sa interiorizeze mesajele pe care piata i le transmitea anterior dintr-un motiv simplu: nu mai merge "s-asa", marginile scad si cererea agregata a produselor proprii scade . Si atunci, organizatia se intoarce pe plansa de design si face restructurare. Asa ca e momentul de optimizare interna si, odata ce lucrurile se aseaza reincep bugetele de marketing sa reintre pe scena. E momentul schimbarii profunde a organizatiei si nu a cosmetizarii pe care, in general, o presupun "campaniile" de marketing. Asa ca, intr-un anume sens, diminuarea bugetelor de marketing are sens.
So far, the financial crisis has not exactly cut marketing budgets, it has simply become a great excuse to do so. As any other provider in the field of marketing can testify, budgets are always shrinking and hardly suitable to meet the client's goals. This financial scenario provides the perfect reason to haggle and cut. It simply has made our job a lot harder, preventing us from giving our clients all the help they can get to overcome the consumers' fears and consumption adversity.
Working in webmarketing, though, I can state that, as of now, there have not been dramatic changes, if not the need to focus more on higher efficiency (in PPC for sure) for the same investment.
Barbara B.
Education Management Consultant and Contractor
Best Answers in: Education and Schools (1)
Well we're considering the possibility that many companies are going to cut their training costs or simply they won't be able to put their human resources on training because they all will be focused on business. We're finding solutions proposing arguments linked to this special economic moments and giving to companies instruments to focus their business during these months.
Barbara Barbieri
More Answers (4)
What crisis !? Where!? :)
Marketing budget will be increased, naturally.
Who said that there is any marketing budget?
All the best
Bogdan
Now we are cheking all the costs. But the mainly concern are the sallary cost not the marketing cost, in our case. I think the answer in this moment ist delay not delete.
