Don’t cut that marketing budget yet

The wake left by the international financial crisis has caused some general anxiety among marketing professionals, and with good reason. Traditionally a downturn in the economy means cutting marketing budgets. And this time, according to a recent survey by MarketingProfs, the financial crisis is causing immediate 2008 budget cuts and already affecting the 2009 budgets of its members surveyed.

But some of the biggest names in branding, (including Procter and Gamble, who survived the crash of the 1930s) are suggesting we do just the opposite. As the shock wears off, a voice of reason is emerging that encourages companies to stay on track, but use dollars carefully. For some companies, this includes increasing, or at least maintaining, online marketing budgets. (In the interest of full disclosure, I should say that as a writer I depend on healthy marketing budgets for my own livelihood. I offer this information based on what experts and surveys suggest the current trends are.)

At the recent annual Association of National Advertisers conference, Stuart Elliott at the New York Times listened in on presentations by head marketers for companies like Hewlett-Packard, Coca-Cola, and General Mills. Here’s what they had to say:

“It’s incredibly important to be risk-takers in the economic climate we’re in,” said Michael Mendenhall, senior vice president and chief marketing officer at Hewlett-Packard, when “people have a tendency to pull back.”

“In economic times like these, you don’t hunker down and go in the bunker,” he added.

Companies such as Coca-Cola, reported to have the strongest brand recognition in the world, aren’t backing down either. Joseph V. Tripodi, chief marketing and commercial officer said,

“Don’t go to the ledge. Don’t let the urgent overwhelm the important.”
“It’s very easy now to panic, and we cannot panic,” he added. “Invest in your brands now, especially in these dry times. The easiest thing is to shut down, and that’s the worst thing.”

Brand recognition is one thing, but getting consumers to buy is another. General Mills is fending off the economic downturn with a new “Home is calling” campaign.

“Right now, given where America is, people need to go back to the comfort of home,” said Mark Addicks, senior vice president and chief marketing officer at General Mills. So a new campaign for the company’s Pillsbury brand will carry the theme “Home is calling.”

And if General Mills is right—and I have a sneaking suspicion they are—people are going to be reaching out for more ways to access information about our products and services from home or office. “Home is calling” may sound corny, but if you were a grown up in the nineties, you’ll remember the undying DIY movement was sparked by the backlash against the excesses of the 1980s and gave us cocooning and internet shopping. I don’t know about you, but the feelings “coming home” evoke in me, especially when thinking of our troops overseas, makes me want hot flaky biscuits.

Whether your company intends to decrease spending or not, before you slash and burn across the board, you may want to consider preserving your web marketing budget or even moving more money into it. Web-based marketing can give you more for your dollar, and give nervous CEOs and CFOs measurable results as opposed to the sometimes ambiguous results from other marketing avenues. At the same time the MarketingProfs survey showed a decrease in both 2008 and 2009 budgets, 60% said they would be increasing their online budgets with 85% reducing their use of traditional marketing vehicles.

In a just-released survey from eMetrics Marketing Optimization Summit more than 64% of respondents say the current economy probably won’t affect their overall marketing budgets, but most report plans to increase or maintain their budgets for Email (83.6%), Online Advertising (77.2%), Keyword Search Campaigns (75.5%), Social Media (61.8%), and Video Advertising (38.2%). eMetrics’ analysis states,

“34.5% of respondents’ marketing budgets are negatively impacted by the economy but only 10-15% of respondents are cutting budgets on online channels. This would suggest that confidence in online marketing effectiveness continues to grow.”

According to the survey web analytics have become increasingly important to senior management.

“Web analytics helps us maximize the effectiveness of our shrinking marketing dollars by pointing out our strengths and weaknesses and providing an actionable roadmap to our most impactful ROI channels online. Tough times really do call for tough measures.”

You can download the entire survey results from the eMetrics web site.

However, if you don’t have a strong web presence yet, all the analytics and optimization in the world will not meet your customers where they are. So perhaps the best advice I’ve seen in the past few weeks on how to stay afloat in tough times came from Erik Sorenson, CEO of Vault.com, Inc., at the CNBC Executive Careers blog:

“If you are web-based and need traffic, power up your search engine marketing. If you’re brick and mortar and need traffic, focus on outdoor or radio advertising, or whatever provides the best value for your dollar. And if brand awareness is the goal, concentrate on those channels that work best and cut the rest if necessary to gain efficiency.

Take a look at which companies are branding and marketing themselves when you’re surfing the Internet, watching TV, or reading the paper. They are working to drive whatever revenue is out there now and they’re positioning for the recovery. Think of it as accelerating through the turn.”