Regional Marketing Budgets Sliced in 2009

November 14th, 2008   •   no comments   

Enough have been said about the impact of the global subprime crisis on the financial markets, economy, and jobs. The axing of 900 staff recently from DBS is just the tip of the iceberg.

Against such a backdrop, how will marketers in Asia fare? Are the roaring years of record marketing budgets well and truly over?

R3, a regional marketing consultancy, recently published a study on Regional Marketing Budget Allocations in 2009. The study was conducted through phone, email and face-to-face meetings with 50 senior marketers in Asia, covering 100 of Asia’s top 500 brands. They include Unilever, DHL, Samsung, VISA, Maybank, Pepsi, Tiger Beer, and Haier.
With the kind permission of Shu Fen (principal of R3), I thought I should the slides here. They do have lots of other quality insights and analyses here so do check them out.

R3 Asian Marketing Decision Makers Research 10 Oct 08
View SlideShare presentation or Upload your own. (tags: marketing r3)

Courtesy of R3

What are the key findings from the survey?

1) More than 40% of marketers in the study are moving into digital and below-the-line media rather than above-the-line channels.

2) Regional and Local marketers behave similarly when it comes to dividing their budgets between Above the Line (paid media) and Below the Line (Digital, Activation and Events). The proportion is roughtly 51/49 in favour of ATL, although trends show that the BTL pie is growing.

3) Budgets in 2008 have already been slashed for more than half of surveyees, with 15% enduring a greater than 20% cut.

4) The economic crisis changes sentiments drastically. Initial forecasts for 2009 in September 2008 were bright and cheery, with 62% projecting increases. However, the same assessment done in October 2008 showed a whopping 94% predicting that marketing funds will be the same or slashed, with a quarter of respondents projecting that this will decline by more than 20%.

Against such a pessimistic forecast, is there light at the end of the tunnel? Definitely. Four areas immediately come to mind:

The first is to strengthen existing customer relationships. Firms should invest more in their existing pool of customers and improving the value that loyal fans can derive from them. Focus on long-term profitability from repeat customers as opposed to short-term gain.

The next area is to build and expand communities. Organisations should not just focus their energies on selling but on organising activities that bond customers to your brand. Start a club or a membership programme, and make your customers feel like part of a larger group. Find out where your customers hang out, and be a street evangelist going out there, talking to them, and finding out what makes them tick.

Companies should be more bold in their forays in social media. Just creating a nice and fancy website (or even blog and Facebook page) isn’t enough. Companies need to be out there as players and participants in the social media arena, cultivating relationships and offering useful content to netizens. The best thing is that most Web 2.o tools are free (or almost free).

Finally, and probably most importantly, firms need to generate ongoing buzz and Word-Of-Mouth. The days of me-too, ho-hum marketing will be over soon as consumers insulate themselves from the din of advertising messages and stare morosely at their fast emptying wallets. To succeed, one’s products and services and marketing approach must be remarkable. Create an enduring consumer spectacle that wows not only hearts and minds, but wallets too.

In a downturn, one needs to do something divinely different. Be the talk of the town, because anything less may simply be an exercise in futility.

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