As marketing budgets decrease, the pressure to justify how each dollar is spent increases, a study shows.
Gulf admen get creative to beat downturn
Shrinking marketing budgets are creating a growing demand for measurement and accountability in the advertising industry, according to a marketing study to be released in next month's Gulf Marketing Review (GMR) magazine. More than half of senior Gulf marketers saw their budgets decline this year compared with last year, while 20 per cent of them experienced a drop of more than 50 per cent, according to the online study conducted with 250 respondents by GMR and Initiative, the international media agency with offices in Dubai. The recession had increased pressure to provide accountability, according to 90 per cent of respondents. "We found that as marketing budgets decrease, the pressure to justify how each dollar is spent increases," said Siobhan Adams, the managing editor of GMR. "More than 50 per cent of respondents have had their marketing budgets cut and 70 per cent said they were feeling greater pressure to justify their marketing expenditure." Although the study found that traditional media advertising, such as television and print, still accounted for the majority of advertising spending, those forms of media were ceding some of their market share to new forms such as online, public relations, sponsorship and promotions. Ms Adams said she was most struck by the speed with which marketers were allocating parts of their budgets to in-store advertising, sales promotions and digital media. "Until now, many companies viewed these as support tactics rather than core elements of a marketing strategy," she said. "Clearly this is changing." The study also found that 80 per cent of respondents preferred to use audited media; 75 per cent said TV people meters were essential and 65 per cent said they would not use a channel or medium if return on investment could not be measured. Richard Beaven, the global chief executive of Initiative and the president of the media jury at this week's Dubai Lynx Awards, said during his address to the festival that the advertising industry still had a long way to go in focusing its efforts on return on investment, rather than just creating media. In addition to presenting some of the GMR-Initiative study results, he also presented the findings of Initiative's recent independent global online survey. The results found that consumers were anxious about spending, avoiding contact with advertisements yet not willing to cut down on their spending on core communications technologies such as internet and mobile phones. "It has taken an environment like this for people to realise just how fundamental these platforms have been in people's lives," he said. The research also suggested that many consumers would not change their attitudes when the recession was over, so marketers must find ways now to reach them in the increasingly important realms of mobile advertising and social networking, Mr Beaven said. In this area, he believed the Gulf, with its high rate of mobile penetration, might be able to stimulate the international marketing industry. "This region has an opportunity to demonstrate to the rest of the world what is possible, and can be delivered," he said. email@example.com