Everyone wants to be ahead of the curve, but no one knows where the curve is.
According to a study by the Association of National Advertisers (ANA) and ‘mktg’, due to lack of visibility, over the past six months two-thirds of US marketers downshifted to more short-term strategies.
Bob Liodice, CEO of the ANA, said in a slight understatement, “The landscape for building brands was jolted by the severity of the economic downturn.”
The ANA found that most marketing budgets, one-half of production budgets and 46% of sponsorship and event budgets had been reduced.
Not all marketing activities are being cut, however.
Most likely to be maintained throughout the recession were research and development, public relations, promotions and new initiatives.
Activities that marketers said were most likely to be increased as the economy starts to turn the corner included pricing deals, online social networking and word-of-mouth activities, and public relations.
Nearly three-quarters (73%) of the marketers hoped to increase marketing activities three to six months before the recession ends. The intent is to get the message out early so that when people have money to spend, they buy.
Once the recession ends, budget increases are expected for general media (68% of marketers), social networking (41%) and testing and innovation (40%).
“It is encouraging to see that marketers are preparing for the rebound with plans for increased media spending, strategically sound brand building investments and logical, expansive use of social media,” said Mr. Liodice.
In May, the Congressional Budget Office (CBO) said it expects the economy to pick up in the second half of the year, meaning that hard times may be close to over.
But the signs are far from clear. The CBO also expects that unemployment will hover around 10% until sometime in 2010.
The road ahead is still bumpy, and very few marketers are ready to shift into high gear yet.
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