Original Article from Directmag.com - Jul 7, 2009 5:42 PM

The belts are getting tighter. More than seven in ten chief marketing officers surveyed by Forrester Research Inc. said their 2009 budgets have been reduced from 2008’s levels – and among those, more than half indicated their budgets had been slashed by at least 20%.

The marketing officers said that budgets for traditional media, such as television, print, radio or magazines, along with staff and training spending and branding and advertising expenditures had be cut by two-thirds from last year’s levels. CMOs also reported more than half of their direct mail budget was gone.

Marketing technology and online advertisings saw spending decreases of 29% and 27%, respectively. Web site development budgets were reduced by 22%, and loyalty program spending was clipped by 21%.

What was spared the knife? E-mail marketing budgets were reduced by “only” 11%, and social media spending was nicked by 7% from 2008’s level.

Measureable marketing may be demonstrating its worth: Among CMOs who anticipate lower budgets, or who have already had their budgets cut, 19% said they cut branding and advertising because “I can’t track its results,” while 26% said the same about their TV, print, radio or magazine expenditures. Disturbingly, however, 19% reduced their direct mail spending because “it delivers the lowest ROI.”

If there is hope, it is in electronics. Forty-seven percent of CMOs whose budgets have been cut are increasing their spending on social media, while another 44% are increasing spending on Web site development. Forty percent will spend more on online advertising, and nearly that amount will pump more financial resources into e-mail.

These functions, the CMOs indicated, were critical to their businesses, or were needed to maintain competitive advantages. And one-third indicated they hadn’t been spending any money on social media “so now is the time.”

Forrester’s survey also offered a glimpse into how marketing is viewed throughout a number of organizations. According to the CMOs, just over half see it as a revenue enhancer that needs to be supported. But 41% indicated marketing efforts are under increasing scrutiny from all levels of the company. And 18% are working in firms where “marketing is seen as a cost center that needs to be cut.”

Contributors Notes:

This news does not come as a surprise. Lower sales revenue directly correlates to curtailed budgets. Cuts are seen in general marketing, overhead costs and even salaries (as we see in many companies today). Even fixed costs are no longer immune as we see leases renegotiated. We all know the current economic climate should call for an increase in marketing exposure to either stabilize market share or better yet, grow market share in light of competitors cutting back on their marketing. Reality is that there is no better time to capture a larger market share when universally, C-Level management is scrutinizing all concepts and looking at "better solutions".

The reality is to pore over marketing budget dollars and re-direct funds to measurable channels with demonstrable response and effectiveness while still yielding excellent exposure accomplished through mass media (typically measured with inferences difficult to track to a specific customer or lead).

CMO’s are under great scrutiny and accountability to show how marketing efforts are enhancing revenue or risk being viewed as a cost center that requires a reduction in spending. An effective remedy is to move a portion of budgeted dollars away from the large ‘agency’ efforts to marketing tools that integrate mass exposure with ‘one to one’ responsiveness directly from your company. This is achieved by integrating your customer marketing database and a prospecting database with an eMail campaign manager, dynamic web-site content management, and social media.

An enterprise marketing management system will respond to inquiries, follow-up to transactions, or assign tasks to individuals in your organization for appropriate follow-up. The best part is that a system like this allows you to modify parameters as well as prioritize promotions and limit the frequency of correspondence to truly nurture a customer relationship.

During my tenure as Director of Database Marketing with Ziff Davis Enterprise, I was originally tasked with creating a consolidated customer database from over a dozen businesses and subsidiaries. This organically evolved into an integrated marketing system. After a failed attempt with a large database company and a fervent RFP process, it was determined that the larger prominent database companies were not suitable for the cutting edge requirements that would give us a competitive advantage for the 21st century. We recognized great success with a younger more agile company in our Events group with Cool life Systems, thus awarding them the contract.

Dashboards and shared reporting keep all marketing personnel on the same page as well as articulate a standard message from within the company across the board while imparting a proactive environment to exchange ideas. It appears the lesson here is not just to reduce your spending budget, but rework it. The concepts and ideas that once seemed unreachable are not only obtainable with today’s technology, but have become necessary. With the right planning, today is a perfect time to justify progressive change without disrupting marketing effectiveness, enabling you to position your company to navigate from 2009 to 2010 in a positive light.