Marketing on a budget

According to a survey by the Institute of Practitioners in Advertising released in July, marketing budgets were facing their sharpest falls over the next 18 months since the terrorist attacks of September 11 2001. Since then, of course, the credit crunch has gained pace. There have been numerous company failures and unprecedented multi-billion pound bail-outs of banks, so it is hardly surprising that the IPA now says even deeper cuts in budgets are expected over the next year.
Advertising and marketing is without fail one of the first areas of expenditure to be cut in an economic downturn and the triple whammy of a squeeze on corporate profits, rising raw material and energy costs and declining consumer confidence means the cut backs will be severe.
However, while many of the four million businesses in the UK do need to take stock of every penny simply in order to survive, abandoning the very process that differentiates them from the rest can be fatal.
Marketing expert Mike Johnston, the former chairman of the Chartered Institute of Marketing, warns that companies cannot ignore marketing in a recession. He said; "When business is slack, it is an ideal time for a company to take stock and make sure that its marketing is as effective as it should be.
"When times are hard and money is tight, extra effort is needed to retain a slice of the shrinking pie."
Of course, it is not always an easy strategy to present to the board that is settling itself in for a rough ride. The most obvious counter-argument is; if no one is buying anything, why spend money promoting a product to an unresponsive audience? The alternative and ‘safe' strategy is to ride it out, suffering lower sales while off-setting them against cost cuts elsewhere in the business.
Appeasing anxious shareholders aside, there is another way of looking at it. A few years down the line, when everyone breathes a sigh of relief that the worst is over, the company that has frozen its marketing campaign is going to have to embark on a very expensive game of catch-up. The odds are that there are at least some more savvy and clued-up business rivals will have been industriously working on campaigns and chipping away at the best customers of its quieter competitor throughout the downtime.
The alternative to freezing marketing expenditure completely is to accept the need for managing costs, but channelling what is left of the budget into a smarter campaign, which will maintain the company's profile while it rides out the storm.
The first step would be to go back to marketing basics and re-work the marketing plan, which will re-shape the firm's efforts around fewer objectives. The plan should recognise that a downturn has a finite lifespan. While it could go on for some time, it will eventually be followed by a fragile recovery, but a recovery nonetheless.
One obvious area for cutting down costs is if a company uses external agencies for event management or PR. By bringing in some of the more basic projects in-house, there is an opportunity to build skills in the team and also raise an understanding of how to manage agencies in the future.
Next, due consideration should be given to ways to create interest and boost sales of a product without spending huge amounts on advertising.
Traditional advertising will inevitably be less expensive during a recession because media space will almost certainly be available at a considerable discount. There is a clear opportunity to make a bigger impact with less of a financial commitment at a time when everyone is cutting back.
This is also an opportunity to stop thinking about advertising in traditional terms, such as a newspaper ad or a leaflet drop, and consider more imaginative solutions. Consider, for instance, a store in a small town. Potential customers will walk past that store every day. What would be more effective; a two-column advert in the local rag, which most people won't see, or an innovative promotion such as a free product trial in the physical space of the store?
Martin Loat, chief executive of marketing agency Propeller, said; "Getting good PR, in the broadest sense of the word, is the key to getting your product known. It's about getting your product or service in front of journalists and using web search tools to reach the communities that might be interested in your goods.
"Trials or free period offers are good ways to get people to try your product and to get testimonials."
Marketing a business on-line is becoming an ever more important way to reach potential customers and, if a company has not done so already, it is almost certainly worthwhile getting advice from a web-optimisation expert on how to make its website search-engine friendly to help drive people to it. The key is to devise a single sentence that sums up the key benefits of the product or service on the front page of the site. It is important too to update a site regularly because search engines are constantly looking for new and updated information and if there is nothing new to look at, why should customers keep coming back? Updates could be news about new products or distribution, or a deal of the month with vouchers that visitors to the site can print out.
With limited resources available, it can be daunting having to consider putting resources to good use, but with a little thought it is possible to create a big impact on a small budget.