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Pricing, WOM, PR Efforts Get Recession Boost

by MarketingCharts staff
Pricing, WOM, PR Efforts Get Recession Boost
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The research found that relatively few respondents reported any marketing initiatives had been shelved or delayed, but many are being reduced , including:

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  • Media budgets (56%)
  • Production budgets (50%)
  • Sponsorship/events activities (41%)

At the same time, the study found that the activities most likely to be maintained throughout the recession include research and development (47%), public relations (42%), innovation/test/learn budgets (33%) and promotion activities (33%):

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The activities most likely to be increased in the current economic environment are pricing deals (47%), social networking and word-of-mouth activities (26%) and public relations (23%):

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Renewed Activities Post-Recession

The study also found that, despite recession cutbacks and tactical strategies, marketers are planning for renewed activities when the recession ends and the recovery begins. For example, media budgets will be increased (68%) along with social networking/word-of-mouth (41%) and budgets for innovation and testing/learning (40%). Nearly three-fourths (73%) of respondents say they will ideally implement these increased marketing activities three to six months before the recession ends, and an additional 16% will implement as soon as it ends.

“The landscape for building brands was jolted by the severity of the economic downturn,” said Bob Liodice, President and CEO of the ANA. “However, it is encouraging to see that marketers are preparing for the rebound with plans for increased media spending, strategically sound brand building investments and logical, expansive use of social media.”

Brand Building Beyond Tough Times

The survey  polled marketers on long-term branding decisions and measurements, in some cases asking identical questions to previous surveys. It found that brand equity is of key importance, with metrics squarely focused on the consumer. Products are the most important item to building brand equity (89%), with customer service ranked second (86%). Employees as advocates for a brand are also very important (81%).

The most effective measure of brand health (defined as the measure to which your brand equity is increasing or declining) is customer experience/satisfaction, which increased to 48% in April 2009 from 37% in February 2007, ANA said.  There is less focus on traditional metrics such as brand image and awareness, which tend to be lagging indicators of brand health.

Warning signs of brand deterioration have also shifted with increased importance being placed on customer-related metrics. According to the survey, marketers are more focused on brand health metrics with increased attention on:

  • Customer conversion/repeat rates (78%, as compared with 70% in February 2007)
  • The percentage of customers who rate a brand as “excellent” (77%, as compared to 68% in February 2007)
  • Net promoter scores (73%, as compared with 67% in February 2007)

“Marketers have increased their emphasis on gauging consumer sentiment and brand health trends,” said Roger Adams, chair of the ANA Brand Management Committee. “With the proliferation of instant feedback using consumer- generated media, marketers can assess the impact of brand marketing campaigns to quickly gauge brand equity, health and signs of deterioration.”

Shift in Media-Channel Effectiveness

The study also found that media channel effectiveness for building brand equity has shifted materially. While TV is still ranked highest in importance (64%), online (61%) and guerilla/word of mouth/buzz marketing (57%) have grown to be on par with TV, with social media being ranked as the next highest effective media channel (40%). Social media ranked highest as the media channel that marketers would like to use but have not yet been able to implement.

As a result, traditional media channels have declined in importance since the first survey was conducted in February 2007:

  • TV (down to 64% from 80%)
  • Magazines (down to 51% from 67%)
  • Radio (down to 30% from 36%)
  • Outdoor (down to 26% from 35%)
  • Newspapers (down to 19% from 36%)

About the survey: This survey was conducted online in April 2009 among the members of the ANA Brand Marketer Leadership Community panel. A total of 129 client-side marketing executives responded to the survey.