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Global marketing budgets cut this year, may improve

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Faced with a sluggish global economy, 44% of multinational companies cut their marketing budgets this year, while only 16% increased theirs, according to "Global Insights," a study by BBN The Multicultural Agency, based in Manchester, England. The remaining 40% of companies surveyed said their budgets remained flat this year.

The report was based on a phone survey of 50 senior marketing executives at multinational
b-to-b companies, conducted by BBN, a network of 21 affiliated
b-to-b agencies. BBN presented the findings last week at a marketing conference in Hamburg, Germany.

Of those companies cutting back, 44% decreased their marketing budgets between 11% and 25%; 21% cut their budgets between 6% and 10%; and 14% reduced budgets between 1% and 5%. Only 7% of companies cut their budgets by 51% or more.

While this has been a tough year for global marketers, there is optimism that the economic situation will improve next year. Eight percent of respondents said the economy would improve significantly over the next 12 months; 36% said it would improve slightly; 30% said it would remain the same; 22% said it would worsen slightly; and 4% said they did not know.

Money matters topped the marketing executives’ list of concerns. Twenty-two percent said their biggest concern was the economy, and 22% said they were most concerned about budget matters. Twenty-one percent identified effective communications as their top concern, followed by customer relations (17%), performance (9%) and reorganization (9%).

E-mail on the upswing

In a separate survey of eight agencies within the BBN network, conducted in August, the company identified global trends and the use of various marketing tactics in different regions of the world. It found the use of e-mail marketing is growing rapidly around the globe; trade show participation is down; and direct marketing is up slightly.

BBN agencies participating in the survey were: Young Co., Santa Monica, Calif.; IAS Communications, U.K.; WOB Brand Communications, Germany; GMASCO, United Arab Emirates; Jones Davis Creative, Australia; GruppoBBN, Brazil; Referro, The Netherlands; and BBN Japan.

All regions reported a decrease in trade show participation by attendees and exhibitors immediately following the Sept. 11 terrorist attacks, although some regions now seem to be bouncing back.

"Because of the global economy, people are spending less money going to things like trade shows," said Bryan Calloway, executive director of BBN. However, he added, "There is increased usage of e-mail marketing in the b-to-b sector overall."

In the United Arab Emirates, overall trade show attendance was down roughly 25% following Sept. 11. But this year’s Arabian Travel Market show in May—the largest show in the region—matched last year’s attendance level, which may indicate a rebound in the business.

In Germany, trade show attendance by Germans is down, but attendance at international shows held in Germany is up.

"Marketing budgets are going down, but there is a strong interest in international shows," said Andreas Schneider, CEO of WOB Brand Communications.

All regions reported a strong increase in the use of e-mail by b-to-b marketers, due to lower costs and high response rates. One surprising finding was the high use of e-mail marketing in the U.K. by companies in the building and construction industries, Calloway said.

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