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Marketers urged to keep on spending

Posted in Advertising, Marketing, Arif Durrani, Latest reporters' blogs March 19th, 2008 by Arif Durrani

Another year, another report telling marketers why they should maintain their advertising budgets; especially in the face of a downturn. The cyclical nature of advertising is well documented, but perhaps less publicised are the numerous industry reports that invariably accompany these peaks and troughs.

This month it’s the turn of the Institute of Practitioners in Advertising no less, which has commissioned a report detailing the long-term risks of slashing budgets in a downturn, called, wait for it, ‘Advertising in a downturn’.

It actually makes for quite interesting and sensible reading, explaining how cutting budgets may be profitable in the short-term, but ultimately runs the risk of weakening the brand in the marketplace.

The findings are based on the premise that it is better to maintain SOV (share of voice) at or above SOM (share of market) during a downturn, and if other brands are cutting budgets then the longer-term benefit for those who don’t are even bigger. It is said to particularly apply to brands in highly competitive, price-driven markets, such as motor fuel and mineral water.

Meanwhile, Guy Murphy, chairman of the IPA Strategy Group, and worldwide planning director at JWT, also reminds us about the impact of strong creative content, something that cannot be supported by conventional data so easily.

The study includes input from leading consultancies Millward Brown and Malik PIMS and draws upon quantitative analysis from more than 850 effectiveness case studies from the IPA databank. It has resulted in the UK’s first-ever guideline to help calculate the impact on profit when ad spend is cut.

The IPA is now urging marketing chiefs to do their sums before making any decisions on 2008/2009 budgets.