1/3 of Companies Have Cut Marketing Budgets this Holiday Season
By David Feldman at 11 December, 2008, 4:46 am
According to a new study conducted by BDO Seidman after the financial market meltdown, 32% of chief marketing officers at leading U.S. retailers state that their holiday marketing and advertising budgets have been reduced this season. Further, nearly half (43%) of the retailers say their budget will remain flat and only a quarter cite an increase in advertising and marketing spending this holiday season. Most of the retailers will spend the majority of their advertising and marketing budget on print advertising, while 21 percent will focus on broadcast outlets and 19 percent will focus spending on internet advertising, including social networking sites. Indicative of an increased interest in going green, a sizable 43 percent of retailers will be increasing their advertising and marketing focus on green products this holiday season, which is up from 37 percent in 2007.
“The recessionary climate has caused retailers to cut back in many ways, and advertising budgets are among the first items retailers consider when reducing spending,” said Catherine Fox-Simpson, a Partner in the Retail and Consumer Product Practice of BDO Seidman. “This holiday season, we can expect that advertising buys will be very targeted, and in some cases more conservative. Historically, in tough times, campaigns become less flashy, more sentimental and heavily focused on value-added items, such as sustainable products.”
These findings are from the most recent edition of The BDO Seidman Retail Compass Survey which examined the opinions of 100 chief marketing officers at leading retailers located throughout the country regarding their expectations of the 2008 holiday shopping season. The retailers in the study were among the largest in the country, excluding automotive dealers and restaurants, with revenues of more than $100 million, including 13 percent of the top 100 based on annual sales revenue. The survey was conducted in October of 2008.
These insights on larger companies are useful predictors of what small and middle market companies are doing as well. However, I have noticed that there are interesting pockets of activity in a few select industries where entrepreneurs are saying to me, “I feel bad that we are doing so well while most people are hurting, but I’m not complaining about it!”
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I’m one of those that feels a bit (but only a tiny bit) guilty. I’ve had my best year ever in several different niche markets.
I think a lot of our economic problems stem from poor consumer confidence driven by the media. I don’t think things would have gotten so bad for so many folks if the media wasn’t constantly telling us how bad everything is… but that’s just my opinion!
No question consumer beliefs and expectations are always big drivers in the economy, and the media play a big role in shaping those expectations. I have also had a record year and have decided not to complain. What will ’09 bring? More uncertainty. Thanks Arvada.