A third of advertisers state they have no specific activity or strategy to respond to potential changes in consumer behaviour caused by the current economic climate, whereas the majority of consumers state that their approach to spending and saving has been altered by the current economic climate, according to new research.
The findings, from the latest Harris Interactive / LinkedIn poll, contrasts consumer perceptions of advertising against the views of advertisers - (the client companies themselves and their marketing, advertising and media agencies).
It reveals that although consumers are cutting down their spending, advertisers aren't responding to this. Almost four in ten (37%) client advertisers and three in ten (29%) agencies have no strategy or activity planned to target consumer behaviour changes.
Only one in five consumers state that their approach to spending and saving is unaffected by the current economic climate. Males are much more likely to continue spending as they were - 27% compared with 14% of females.
This suggests the attitude to shopping is driven by the type of purchases: females tend to remain responsible for more day-to-day purchases than men, and savings made at the housekeeping level will support other choices of discretionary spend.
The fact that a minority of consumers see their spending as unaffected by the current economic conditions is supported by recent statistics that show consumers are becoming more cautious and discretionary in their spending...paying off debts, reducing mortgage arrears, borrowing less, using debit cards more and credit cards less*.
Amongst those advertisers who do have a specific activity or strategy to respond to economic conditions, 'focused spending' - ensuring a brand/product is not cut out by consumers who want to save money to spend on other areas of life - is favoured the most, with just over one in four advertisers (27%) stating this as their current advertising strategy, though it resonated more with agencies (31%) than clients (23%).
Over one in eight consumers state they are behaving this way - they are cutting out some things completely so they can still afford the same quality things in other areas of life. Younger males are the most likely to express this view.
Strategies for the current economic climate
Agencies and client advertisers: Thinking about your current advertising strategy, which one of the following consumer strategies is it most closely aligned to during the current economic conditions?
Consumers: In the current economic climate, which one of the following strategies would you say best describes your current approach to spending and saving?
Base: GB Adults (1,965); all agencies and client advertisers (188 agencies, 184 client advertisers)
Very few advertisers feel that they are 'trading down' - promoting cheaper or own label options to replace branded goods.
This is perhaps not surprising - it is primarily an option open to retailers only. However, not a single agency or client advertiser claims to be 'trading off' - promoting a brand in partnership with lower-cost partners.
However, consumer shopping patterns reveal that 'savvy shopping' - matching premium products with cheaper brands e.g. 'Heinz beans on own-brand bread' is a growing trend.
Andrew Freeman, Senior Media Consultant at Harris Interactive commented, "Advertisers are not striking a chord with consumers, and are missing opportunities for innovative pairings and partnerships, to meet the needs of an economic climate in which half of all consumers are making some form of sacrifice - either by choosing cheaper options or own-label goods, or saving money on some things to still have certain luxuries.
Females (33%) are significantly more likely to be buying cheaper or own-label goods than males (23%). Older females (55+) and males aged 45+ are less likely to trade down than their younger counterparts. Females (24%) are more likely to save money on some things to still have certain luxuries compared to males (19%).
However, advertisers - or at least those marketing primarily to consumers - are striking a chord in terms of using sales or price promotions to drive sales peaks (including coupons, discount periods, vouchers, etc). 17% of advertisers marketing primarily at consumers state they are currently using this 'Luxuries for Less' strategy - perfectly aligned to the 16% of consumers who claim they are only buying brands they used to buy if they can find bargains and discounts (including coupons, sales, vouchers, etc).
Interestingly, males (15%) and females (17%) are just as likely to be behaving in this way. Differences do emerge however in terms of age; males aged 45-54 and females aged 55+ aremore likely than their younger counterparts to be aligned to this behaviour.
LinkedIn/Harris Poll of 1,965 members of the GB public (aged 16+) surveyed online between November 18th and 24th 2009 and 372 advertisers from ad agencies or corporations who advertise (188 agencies, 184 corporations), surveyed online between November 24th and 30th . The agency and advertiser respondents for this survey were selected from LinkedIn's members who have agreed to participate in survey research.Return to marketing news headlines
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