Good news amid uncertainty, fear and a weak economy

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Will you increase or decrease spending on marketing in the second half of the year? Or, like many of the respondents to BtoB’s cross-media advertising survey, do you simply not know?

When asked about second-half spending plans compared with 2000, a whopping 37.5% of the media buyers and sellers said they didn’t know. Another 30.7% said spending would be the same, 18.2% said it would be greater and 13.6% said it would be lower. This compares with only 12.4% who didn’t know when asked about their spending plans in the first six months of this year.

The cross-media survey, published in our April 30 issue, was officially presented last week at the annual conference of the American Business Media, which co-sponsored the research with BtoB. Read Reporter Matthew Schwartz’s coverage of the ABM event, and the discussion around the cross-media survey, starting on Page 6.

Is there a silver lining to all the anxiety about the economy? Maybe. For marketers, there are at least three positive effects of the current economic downturn.

First, advertising agencies are revamping their compensation models, eager to find ways to deliver more value to their clients and spur business. Some of these agencies floated too far out into the dot-com money stream, and are now paddling back to shore from these treacherous waters. Today is an ideal time to make a deal—or renegotiate an existing deal—with your agency, many of which are moving off traditional "billings-based" compensation plans. Read Senior Reporter Kate Maddox’s story on changes in agency compensation models, the second of a three-part series on the advertising industry. Maddox’s story starts on Page 1.

Second, the dot-com fallout, and the resulting pinch on media companies, is putting downward pressure on advertising rates, a scenario some advertisers are eager to use to their advantage. "We believe that although our marketing budget is holding steady, that money will go further. We’ll leverage global buys," Oracle Corp. Senior VP-Product and Services Marketing Jeremy Burton tells BtoB’s Senior Reporter Philip B. Clark in a Q&A starting on Page 7.

Third, the prices charged by Web development firms present real bargains from just a year ago. BtoB’s exclusive Web Price Index quantifies this phenomenon. Our WPI sought out Web developers to bid on hypothetical projects (small, midsize and large). The result? Even though BtoB increased the technical and content requirements of its projects this year—changes that should have driven costs up—"the current market conditions keep them near or below last year’s levels." The WPI report begins on Page 15.

Finally, visit the new discussion area at to discuss these stories or swap stories with your industry colleagues. Or send me e-mail. I’d like to hear from you.

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