Over the last couple of weeks I have been speaking with a lot of people, regarding the slow-down in the economy, to get a sense of impact on their respective businesses – some are already hit, others are worried about orders/ contracts not being renewed; everyone is bracing themselves for times ahead and planning action; view regarding how long the slowdown will last vary – from 6 months to 18 months or longer.
Salary cuts are being discussed/ implemented (I think, as a necessary first step, a temporary salary cut is an eminently better way of managing the situation than firing staff).
Newspaper reports suggest marketing & advertising budgets are being scaled down.
According to a recent poll by marketing consultancy firm R3 of at least 50 marketers who manage around 100 of Asia’s top 500 brands, three out of every four Indian companies will spend on marketing in 2008-09 as much as or lower than what they did in 2007-08. And a study released recently by media specialist Zenith Optimedia said growth in advertising budgets in India in 2008 would be 4.5% (over the previous year) compared with a 24.5% growth in 2007 over 2006.
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“The events since the credit crunch have hit marketers hard,” said Greg Paull, co-founder, R3. Paull predicts there will be significant reductions in marketing budgets in the coming year, even in growing markets such as China and India.
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He added that at least 40% of Indian marketers said they were going to spend more than originally planned on digital media, direct media and promotions.
Why am I not surprised by the last comment? And, I believe that social media is going to be a large beneficiary of this increased spend.
Last two years have showed that categories, organizations where availability of budgets was an issue, adoption of social media has been faster. Similarly smaller/ mid-sized brands/ organizations have adopted social media faster vis-à-vis large brands/ organizations – they had more time than money and were hungrier.
Now however, many more marketers who had it easy until now, given the boom of last few years, are forced to look at new ways to reach the customer – keep existing ones, tempt new prospects to buy – this in times of salary cuts/ job loss – and do this with same/ reduced budgets.
Add to this Internet’s strategic importance and increasing impact of social media on purchase decisions, are you surprised that blogs & social media spell the new wave?
I expect more marketers to:
- Listen to what customers are saying.
- Engage with existing customers to build and enhance relationships.
- Leverage social media to build communities to narrow cast, rather than use expensive broadcast tools.
I expect more organizations to:
- Engage with stakeholders – internal/ external – to win trust, retain knowledge (crucial if you are gonna ask some people to leave), motivate, bring policy change?
And all the other things we know blogs & social media can deliver.
Adoptions now will, of course, continue to deliver value even as good times roll in… again.
Slowdowns like this are good drivers for innovation, as I witnessed at a workshop recently, but let’s keep that for the second piece of the series.
