The Independent Practitioners of Advertising’s (IPA) latest Bellwether survey has found that the rate of decline of marketing spend slowed in Q1 2009, suggesting marketing budget cuts may have reached their peak in Q4 2008. Business confidence has picked up from the all-time low of Q4, with the percentage of companies believing their prospects have improved rising from 5% to 14%.
Moray MacLennan, IPA President said “This data supports the view that the bottom of the market has been reached. It will be a long road to full recovery, but this maybe the turning point. It’s good to see a graph going in the right direction for a change.”
Although the overall budget cut is still the second steepest decline in the survey’s nine-year history, with spend set to fall again in 2009, the net balance of those reporting an increase minus those reporting a decrease rose from -42% in Q4 to -34% in Q1.
The hardest hit budgets were for main media advertising and ‘all other’ which includes PR, events sponsorship and market research. This is obviously reflected in the Kent marketplace where we have seen significant retrenchment in virtually all media in the county. Meridian’s strategy has been well documented in these pages. Northcliffe Newspapers (Adscene) have closed a number of titles and merged many others. The publisher of this newspaper - KM Group have also closed titles and reduced staffing levels.
Clearly, the revolution in media consumption continues apace, brand and relevance are the key drivers now more than ever in people’s media choice. The development of niche communities and the ability to retain the interest of these communities with relevant articles that appeal to the reader’s predilections are more than ever the “killer” functions. So what does this mean for media owners- they need to (with greater urgency than ever) understand the readers and listeners. In simple words data. Media which collate lifestyle information and exploit it will be in the box seat for many years to come, and most importantly will be able to offer their advertisers a more valuable proposition which will drive the all important yield/rate element for the future. As a marketer these are the basic innovations that I expect as we extract maximum value on behalf of our customers!
Getting back to advertising spend, remarkably, internet advertising suffered a record reduction in spend, but at a far slower rate than total marketing spend*, this indicates a gain in market share now estimated at almost 10%. With classified spend now being almost entirely on line the movement of this vital revenue stream has moved with incredible speed from traditional to new media, leaving print in particular with a massive headache.
Traditional media though should still have a part to play in modern communication strategy, it’s just that it will look very different from the past, specifically the days of pages and pages of cars, jobs and houses are unlikely to return. Estate agents, car dealers and recruiters should plan to use the papers as part of awareness and DR marketing in a similar way to that which retailers have done for years.
*The numbers in the report represent the percentage of companies increasing their spend minus the percentage reporting an increase.
Simon Clubley is a director of The Wow Factory, the Charing based full service agency and can be contacted on 01233 713852 or simon.clubley@thewowfactory.co.uk
The beginning of the end? Or the end of the beginning?
Thursday, 30 April 2009
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Perhaps it isn't an end of their era but rather the sophistication of their practice, transcending into better platform and making their processes cheaper with an (almost) free strategy.
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It indicates a gain in market share now estimated at almost 10%. With classified spend now being almost entirely on line the movement of this vital revenue stream has moved with incredible speed from traditional to new media.
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