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C-Suite: Ad Providers More Important to Strategy
As cautiously optimistic global C-suite executives continue to focus on cost-containment, they expect that their advertising and communications providers will become more critical to their business strategy in the coming months, according to (pdf) research from Doremus and the Financial Times. The sixth annual “Decision Dynamics” study found that, at 20% more important this year, advertising and marketing providers topped the list of other types of providers in terms of their growing significance in companies’ business strategy:
Tempered Optimism
The survey also revealed that between 40% and 50% of respondents say they expect improvement in local and industry conditions, as well as improvement in their own companies. However, this optimism doesn’t appear to have hit their budgets yet. Spending plans remain similar to what they were a year ago, when economic conditions were perceived to be “getting worse” across the board.
Staffing Cuts Outnumber Hires
For the first time since the survey began in 2003, the number of senior-level executives who intend to cut employment outnumbered those planning to hire, the research found.
When respondents were asked how their organizations’ employment numbers would change compared with last year, 25% say they plan to hire this year, vs. 32% who plan to cut employment. In 2008, these proportions were reversed.
“Proactive” Suppliers To Win Business
When asked the question: “Which supplier is more likely to get work from you in prosperous times as compared to tough times?” respondents say the provider who is “most proactive about helping” will get their business, in good times and in bad. These providers trump those who bargain with price, or with whom the executives had an already established relationship:
Additional study findings:
- As in most previous years, IT is the area most likely to see increased spending. The 39% of respondents planning to increase IT spending over the next 12 months outnumber those who plan to decrease spending by almost two to one. R&D is the only other area where increases outnumber decreases by more than a few percentage points.
- Cost containment/improving efficiency is a top objective for more than 60% of companies. The three growth goals - improving market share, introducing new products and services, and expanding into new markets – make up the second tier. Finding and keeping talent is an issue for significantly fewer organizations this year than in the past few years.
- Levels of trust in suppliers have been declining since we initiated this survey in 2003, and in a number of cases have plummeted this year. Trust in suppliers from all financial services categories have declined significantly, with commercial and investment banks being particularly hard hit.
- Half of respondents say their organization manages more aggressively in recessionary times, while less than one-fourth say they become more conservative. Not surprisingly, the more aggressive organizations are more likely to be planning to spending increases, especially in IT and in advertising and communications.
“Senior level executives are treading cautiously,” said Carl Anderson, CEO of Doremus. “But there are signs of optimism rooted in traditional business values, such as appreciation for service providers that are proactive about helping over simply using those who offer the cheapest price. These are all positive, optimistic signs that things are starting to turn in a favorable direction.”
About the survey: The survey polled 470 executives from a mix of industries and company sizes in North America, Europe and Asia.
