Advertising Age reported on an ANA survey showing that 52% of clients will ask their advertising agencies to reduce internal costs over the coming year. Why are clients completely comfortable making demands on nearly every aspect of the business—and expecting agencies to comply without complaint—except when it involves diversity? Hell, clients could solve the dearth of diversity overnight. All they have to do is say, “Make it happen, White boys.”
ANA Survey: 52% of Marketers Will Ask Agencies to Lower Internal Costs
Brands Are Being Asked to Be Conservative With Spending
By Rupal Parekh
Marketing budgets haven’t changed drastically in the past year, yet brands are being asked to be highly conservative with spending, a new Association of National Advertisers study has found.
The spending survey, the sixth the ANA has conducted, was fielded in January via an online poll of its members. Nearly 250 client-side marketers responded.
The good news? Comparatively few plan to cut agency compensation—only 17% of all respondents, which is the lowest since 2008. Instead, they are asking agencies to look internally for ways of reducing costs. More than half (52%) of marketers surveyed will during the course of this year challenge their agencies to reduce costs internally.
In essence, that means marketers are asking agencies to share the burden of being cost-efficient. More marketers today are saying that they are under pressure to tightly manage their controllable spending; last year 77% of respondents said they were asked to control spending, and this year that number jumped to 84%.
“It’s not just marketers who are feeling the pinch,” said ANA President-CEO Bob Liodice in a statement. “All of our partners feel the impact of this year’s projected trends, as modest spending trends undoubtedly affect business processes throughout the supply chain.”
He added: “Though the industry outlook is trending toward stability, marketers need to be careful not to simply rely on short-term answers to solve enduring budget issues.”
Some of those short-term budget cuts that are being made to reduce overhead expenses include professional development and hiring of full-time talent. The survey found that 28% plan to lower investment in training of talent and attendance at conferences, while 21% are planning to use freelancers to fill open positions. The ANA stated that both figures were up from 2011 but was unable to immediately provide a comparative number.
Marketers are also planning to reduce costs in travel significantly—by 68%.
The respondents also said that they are toying with the media mix and using different marketing channels to try and lower costs. Despite the cautious environment, the survey found that nearly half of marketers surveyed (49%) will keep their ad budgets flat. For the 34% of companies that said they will reduce budgets, reductions are expected to be higher than last year, with 33% of those companies expecting to trim marketing budgets by 11% or more.
Some marketers out there are spared from the heat; 17% of respondents said they believe their advertising budgets are slated to go up.
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