'Adverts off the promos priority list'

The old adage ‘you have to spend money, to make money’ appears to be resonating with Britain’s bosses, as they seek both on and offline ways through the recession.

They have set aside more cash for PR services and website marketing, particularly search engine optimisation, to spend on promoting their business over the next year.

For being the likeliest sector to increase its marketing budget, business services companies emerged as offering the most opportunities to such personnel in 2009.

Property services will be the most constrained, and retailers or wholesalers will also cut spending by more than most, says a survey of 1,500 firms by Shape the Future.

However, the headline finding that just nine per cent of all respondents were planning to spend less on promotions in 2009 represents a “historic turnaround.”

Traditionally in a recession, companies ensure Marketing and PR are the first disciplines to be hit, the group explained, as they look for easy and available savings.

But given the focus on PR and SEO, and that a significant number of respondents plan to spend more on print promotions, bosses look like they are changing tack.

“Companies are moving towards finding that lucrative balance to meld on and offline activity to boost their bottom line,” said Peter Martin, Shape the Future’s managing director.

“The key is knowing where your customers are and what they are likely to respond to the most.”

Yet not everyone in the business of promotions is said to be sitting comfortably, according to recent readings of the US and UK advertising sectors.

Enders Analysis says total advertising in the UK will fall by almost 5% in 2008 to £16.8bn, before a further slip of 12% in 2009 - the largest single year fall since 1975.

Spending on display ads will fall sharply, and will accelerate what the firm said were “structural changes” in the UK’s media landscape, mainly due to the shift to online.

British ad workers will be hoping their clients follow the lead in the US, where online ad revenues hit $5.9bn in the latest quarter, up 11% from the year before.

However, the Interactive Advertising Bureau said the figure represents a slowdown from the 15% growth in the previous quarter, and the 18% yield in the first three months of the year.

Randall Rothenberg, the IAB’s chief executive, said interactive advertising was still the “most measurable and cost-effective” way to reach consumers but noted its growth in recent years was being stabilised by the downturn.

David Silverman, a partner at PwC, confirmed that a weakening economy will continue to be a challenge to all forms of advertising-supported media.

“However, the internet should be better poised to withstand the storm given its ability to combine performance-based advertising along with broad-based branding.”

According to reported research by Enders, online advertising, which grew at 39.5% in 2007 and is forecast to rise 20% this year, will achieve thread-bare growth of just 2.1% in 2009.

 

27th November 2008

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