Economy Still a Concern Leading to Restrained Spending

Marketers are still being pressured to reduce their costs and spending in light of the economy, finds a new survey by the ANA (Association of National Advertisers). Today, 87 percent of respondents indicated they are identifying cost savings and reductions, the same as one year ago, and only slightly improved from 93 percent six months ago.

The top four ways marketers are reducing costs and spending remain the same.

81 percent are reducing departmental travel and expenses

74 percent are reducing advertising media budgets

71 percent are challenging agencies to reduce internal expenses and/or identify cost reductions

64 percent are reducing advertising production budgets

Reducing agency compensation continues to gain greater consideration by marketers. 56 percent are planning to do this today, versus 48 percent six months ago and 32 percent a year ago.

A positive note is that fewer marketers are eliminating/delaying new projects, compared with past surveys-53 percent in the most recent survey versus 58 percent six months ago and 61 percent a year ago.

"Marketing has been dramatically altered by the current economic conditions," said Bob Liodice, President and CEO of the ANA. "Our ongoing series of recession surveys show that while marketers are consistently hopeful, the reality is that more tempered spending has become the new norm."

This third installment of ANA's recession survey follows surveys conducted in July/August 2008 and January/February 2009. 128 client-side marketers responded to this most recent survey.

Marketers' actual spending was lower than forecast in the previous survey.

In January/February 2009, 49 percent of marketers thought their advertising budgets would be reduced in the next six months, when in fact, 62 percent experienced a budget decrease.
43 percent thought their budgets would remain the same, but only 31 percent did indeed stay the same.
8 percent thought they would see a budget increase, whereas 7 percent did.

Looking Ahead

Marketers are cautious about their future budgets. 17 percent are hopeful that their budgets will increase while 39 percent think that they will see reductions and 44% think they will remain the same

Full survey results are available at www.ana.net/recessionsurvey3