Marketers Need to Remain Confident
The bleak economic climate is being reflected in marketers' outlook: high numbers fear their own and their company's prospects will worsen next year, and spend for some sectors will be squeezed
The Chartered Institute of Marketing's latest Marketing Trends Survey (Autumn 2008) reveals that marketers are gloomier than ever about the UK's economic outlook. An all-time high of 70% believe conditions will worsen in the year ahead - up 30% on last year. Only 11% believe conditions will improve next year.
Age significantly affects attitude: 80% of marketers aged 46 to 55 say conditions will worsen, while 59% of marketers aged 26 and under agree with this.
The troubles in the wider economy are mirrored in marketers' confidence about their own organisation's prospects. For the first time in four years, those who think business for their organisation will get worse in the next 12 months (29%) outnumber those who believe it will improve (27%). This compares with, respectively, 11% and 56% last year.
Interestingly, marketers in organisations with a turnover of less than £10m are much more confident about their organisation's prospects than those working in organisations with a turnover of £10m or more, with 35% of marketers from smaller firms predicting business will improve in the next 12 months, as opposed to 23% of those from larger firms.
Confidence about an organisation's prospects in 2009 also varies considerably between sectors. Marketers working in the retail, distribution and leisure sectors are most concerned about their company's prospects (38% anticipate it will get worse), closely followed by the technology and telecommunications sector (36%). In marked contrast, just 18% of marketers in the public and charity sectors believe conditions will worsen.
Such fears about the UK economy and their own organisations are yet to fully feed through to the job market, though there has been a marked deterioration in sentiment in the past six months. Two-thirds of marketers expect no change in size of their organisation's job function, and there are still more marketers who expect an increase rather than a reduction in marketing staff in their organisation (17% against 15%)
Concern about individual prospects is highest in the retail, financial and other service sectors, where more than a third of marketers surveyed are worried about their job prospects.
Encouragingly, two-thirds of marketers agree with the statement that marketing is seen as key to their organisation's future prospects in the economic downturn.
Again, organisational size has a significant impact on attitudes. Among marketers working in organisations with a turnover of £10m or less, 82% agreed that marketing is key; for those in companies with a turnover of £100m or more, only 58% agreed this is the case.
The economic downturn has already meant that half of marketers surveyed (49%) have had to significantly alter their marketing plans, rising to 60% of marketers in the retail, distribution and leisure sector, and 57% in the financial and other service sector. Although marketing spend is at present holding up well at an average of 7.6% of an organisation's turnover (excluding salaries), where that money will be spent is showing significant changes.
Spending for this sales year is anticipated to rise by 1% on last year for online activities such as social media, blogs and viral campaigns, 0.9% for email marketing and 0.8% for customer relationship marketing. By contrast, spending on advertising, excluding online, is anticipated to fall by 3% on average; spending on sponsorship is expected to fall by 2.3%.
Marketers were also asked which marketing activities delivered the best value for money. Across all sectors and organisational sizes, customer relationship management was seen to deliver the best return on investment, with 20% of respondents citing this as the single most effective activity. Public relations also proved popular (11%), followed by lead generation (8%), online advertising (8%), traditional advertising (8%) and email marketing (8%). By contrast, advertising (excluding online) was said to deliver the worst ROI by one in four marketers. Sponsorship too fared badly (12%), followed by direct mail (8%), and online advertising (7%).
The survey also looked at awareness of legislation affecting marketers and social marketing. In line with previous studies, there are high levels of ignorance of new industry laws. When asked about the Unfair Commercial Practices Directive, 80% admitted they had only a poor understanding of the law and its implications for marketers.
The survey reveals that most marketers see social marketing as a positive force, with 56% agreeing that it will be instrumental in helping to transform many lives for the better, although older marketers are more sceptical of its ability to change behaviours (only 44% of those aged over 46 years agree, as opposed to 64% of those under 26).
When asked whether the idea of governments using public money to change the attitudes and behaviours of its citizens through social marketing was "deeply disturbing", just 14% expressed unease, while two-thirds (68%) were unconcerned. v
Marketers are clearly bracing themselves for challenging times, and many are already significantly altering their plans to cope with the radically different climate of a recession.
As the recession begins to bite, marketers will need to ensure they are finely attuned to the changing needs of their markets and customers. With every part of the business under intense scrutiny, they must use their resources wisely and monitor closely the effectiveness of their marketing activities. ROI of activities will increasingly be expected of every marketer, and those who fail to monitor and measure their activities will swiftly be exposed.
It is heartening to see so many marketers expressing the belief that marketing is now recognised as key to their organisation's future prospects. By creating real value for their organisations and measuring the effectiveness of their marketing activities, they can clearly demonstrate how indispensable they are to their organisation's survival and success.
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