ANA Survey: 52% of Marketers Will Ask Agencies to Lower Internal Costs
Marketing budgets haven't changed drastically in the past year, yet brands are being asked to be highly conservative with spending, a new Association of National Advertisers study has found.
The spending survey, the sixth the ANA has conducted, was fielded in January via an online poll of its members. Nearly 250 client-side marketers responded.
The good news is that comparatively few plan to cut agency compensation -- only 17% of all respondents, which is the lowest since 2008. Instead, they are asking agencies to look for ways to cut costs internally. More than half (52%) of marketers surveyed will challenge their agencies with such a request during the course of this year.
In essence, agencies are being called on to share the burden of cost-efficiency. More marketers say they are under pressure to tightly manage their controllable spending. Last year 77% of respondents said they had been asked to control spending; that number jumped to 84% this year.
"It's not just marketers who are feeling the pinch," said ANA President-CEO Bob Liodice in a statement. "All of our partners feel the impact of this year's projected trends, as modest spending trends undoubtedly affect business processes throughout the supply chain.
"Though the industry outlook is trending toward stability, marketers need to be careful not to simply rely on short-term answers to solve enduring budget issues," Mr. Liodice added.
Some of the short-term budget cuts being made to reduce overhead include professional development and hiring of full-time talent. The survey found that 28% plan to lower investment in training and conference attendance, while 21% intend to use freelancers to fill open positions. The ANA said both figures were up from last year but could not immediately provide a comparative number.
Marketers also plan to a significant, 68%, reduction in travel expenses.
The respondents also said that they are toying with the media mix, using different marketing channels to shave costs. Despite the careful environment, the survey found that nearly half of marketers surveyed (49%) will keep their ad budgets flat. For the 34% of companies that said they will reduce budgets, cuts are expected to be higher than last year, with 33% expecting to trim by 11% or more.
Some marketers have been spared, with 17% saying they believe their advertising budgets are slated to rise.