Today’s Wall Street Journal headlines look pretty scary (“Bailout Plan Rejected, Markets Plunge, Forcing New Scramble to Solve Crisis”). It’s clear that the engines driving the U.S. economy are not going to be hitting on all cylinders anytime soon. And that’s bound to be scary for marketers since marketing budgets are historically the first to be cut in a downturn. In fact, according to the National Advertisers survey released in August, 87% said they were already being asked to identify cost savings and reductions for their current marketing due to the struggling economy. Of those respondents, 10% thought cuts could reach 30% or more.
You can find plenty of advice and research on why you should not “rush to slash marketing spending.” The problem is that your CEO is just not interested in listening to your marketing defense case study under the current circumstances. Face it; you are going to have to make some cuts so you need a plan. Three major spending areas include people, programs and technology. As a marketing executive I’m going to squeeze the agencies and media companies first. So, they need to be prepared to identify cost reductions. Remember all those past conversations about wanting to be my “partner” and not just a vendor? Well now is your chance to prove it. Next on the list is technology. Sorry, but that new lead scoring systems, etc is now on hold. For my marketing technology vendors with maintenance agreements coming due get ready to negotiate because there are no “get out of jail free” cards. Finally, I hate to cut staff. In fact, I’d rather suggest a salary reduction starting with the executive team first in order to save jobs at all levels. However; I’ve found that not too many share my point-of-view. So, yes there will probably be less head count before it’s all over. And that breaks my heart because good talent is not likely to come back when the pinch is over.
I could not agree more and I do share you view on cutting salaries rather cutting jobs.
Marketing seems to be the first to get a spending cut but I think this also opens the door for negotiations and cheaper marketing.