Changes to Marketing Spending and Strategy Coming in 2009

by Ginger Conlon
The 1to1 Blog

How the current economy is affecting marketing budgets and the customer experience are hot topics right now. So last week I asked readers and LinkedIn members to respond to a brief survey on potential changes to their 2009 marketing budget and strategy. Some results surprised me (I thought that "decreasing our marketing budget" would get the lion's share of votes, but it didn't); while others were expected (a continued shift toward social media marketing).

Nearly 60 people responded to the survey; a few sent comments, as well. I found the comments to be telling.

For example, Tiffany Bentley, national marketing coordinator at Triad Manufacturing, said "I think it would be crazy to cut back marketing dollars in a time like this. This is the time when you need to be top-of-mind more than ever before to keep ahead of competitors who are feeling the crunch [and] cutting back their advertising and becoming less and less visible to their market. These are the times where marketers can really do their jobs. If you get creative and focus on frugality in other areas, spread your marketing dollars out wisely but continue spending (relatively) what you have been spending, and negotiate, negotiate, negotiate with ad rates, your customers will remember you, new customers will find out who you are, and you will come out smelling like a rose and looking like the strongest lion in the pack (even if you are struggling just as much as the next guys)."

While Andy Lorin, senior marketing analyst for Bonasource, said, "Whatever we may think about marketing and its grandiose goals, it's still part of a company's P&L. When the economy is in trouble, it hits the total budget, including the marketing one.... The major issue here is the level of future spending. Mainly, marketing's job is to make an intelligent bridge to any potential spends in waiting. While they're on hold, it's hard to expect any significant marketing surge. Simply, because it'd be an empty shot to nowhere. Once the economy fundamentals have come back to normal along with spending amounts, we may see marketing budgets bouncing back and up."

The survey responses also spoke volumes. About one third of respondents said their 2009 marketing budget would increase, another nearly one third said it would decrease, and close to 40 percent said it would remain unchanged.

Company size played an unexpected role. Nearly 40 percent of small business plan to increase their marketing budget in 2009, but only a quarter of midsize company and 15 percent of large enterprises plan to do so. About a third each of small and midsize companies expects to decrease their 2009 marketing budget, while nearly 40 percent of large enterprises will be tightening their purse strings. Additionally, a quarter of respondents said their marketing budget would increase as a percentage of their organization's revenue, while 34 percent said it would decrease, and 36 percent said it would stay the same. Five percent said this didn't apply to them.

When asked whether they're planning to reallocate marketing resources in 2009, responses were in line with what one might expect. The top three areas flagged for increased spending are social media (69 percent of respondents), email (68 percent), and search (50 percent). The top three in line for cutbacks are print (44 percent), direct mail (33 percent), and trade shows/conferences (28 percent).

Customer engagement is the number one marketing goal for 2009, with nearly two thirds of respondents citing it as their primary objective. Also cited as a high priority for 2009 are lead generation (41 percent of respondents), awareness (39 percent), and branding (35 percent). Based on these goals, I'm not surprised that most marketing budgets are holding steady or increasing.

"Should we really change?" asked Rene Lisi, a CRM and customer experience consultant, in reference to whether marketers will change their budgets or strategy for 2009. "We must avoid focusing on short-term earnings (increased fees in financial services, etc.). We should focus on building trust and service quality."

Click here to view the full survey results.