Amid Budgetary Bloodshed, Social Media Marketing Is Spared

Forrester Research recently released the results from its first quarter CMO Recession Online Survey, indicating at least one palpable effect of the down economy: More than half of the marketers surveyed reported their budgets had been cut at least 20 percent, primarily in traditional media. Social media marketing, on the other hand, seems to have fared better than most: Among those reporting overall budget reductions, social media was the channel targeted for cuts by the smallest share of marketers (only 7 percent of respondents) and represented the most popular channel of marketing to see any budgetary increase (47 percent of respondents).

Lisa Bradner, principal analyst at Forrester and author of the report, recalls marketers singing a different tune a year ago. When asked at the time to predict the degree to which their budgets would get cut, she says, most brushed off the matter, reporting a modest 3 percent cut. "There was definitely a feeling that 'We're going to be fine,' " she notes, dryly.

But the surprises run deeper than that, she says. Here we are, a year later, and these unexpected budget cuts -- and other reactions to the current financial situation -- are actually forcing marketing departments to move away from the "safe and secure" and into new channels of communication. Even as marketers inch toward new media, she says, the role of marketing hasn't changed no matter how much the tactics may have.

Seventy-one percent of respondents reported overall marketing-budget cuts, and 51 percent said those cuts were of at least 20 percent. Drilling down into the 71 percent cutting their marketing budgets, Forrester asked respondents to identify the areas affected:

Marketing Area	% of respondents who decreased spending	% of respondents who increased spending
TV, print, radio, or magazines	67	4
Staff and training	66	5
Branding and advertising	64	11
Direct mail	52	7
Marketing technology	29	27
Online advertising	27	40
Web-site development	22	44
Loyalty programs	21	14
Email marketing	11	38
Social media	7	47

It's worth noting that marketing organizations are pinpointing their strongest channels and making the necessary investments -- the most obvious shift being toward digital media such as Web-site development, online advertising, and social media. For instance, 40 percent of respondents reported that Web-site development was "critical to my business," followed by 20 percent who said investment in the Web site was necessary "to maintain a competitive advantage."

"People continue to find that social [media] and the new channels are stuff [they] have to do," Bradner says. "Whether [they] like spending that money or not, they have to be there."

While Forrester does not claim that the sample size of this study -- only a few dozen marketers -- is representative of the entire population, the makeup of survey respondents points to the actions of industry leaders. Sixty-seven percent of respondents are from organizations that earned more than $1 billion in revenue in 2008. Bradner also points out that more than one-fifth of the chief marketing officers surveyed -- 22 percent -- were in the financial services field. "They believe they're going to make it," Bradner says of the financial service industry.

And "making it" may be more than just a desperate hope for some marketers. In previous recessions, Bradner says, survival meant "hunkering down and doing the same thing we've always done." This time, though, marketers are adjusting, moving, and reacting. Bradner doesn't suggest that the results of this survey are radically new, but she says that the results reaffirm the world's continuing realignment.

The change, however, isn't necessarily altering the nature of marketing itself. The real impact is being felt in the manner in which marketers are conducting the task at hand. Yes, Bradner says, the consumer is now in control, but smart marketers understand that the company still needs to be at the root of the brand. Marketers still need to own their brand and engage consumers with a brand message. "Marketing still has a really important role and that role hasn't shifted," Bradner says.

In fact, Bradner stresses, while digital media such as email and search advertising may be more cost-effective, unwary brands risk hurting their images in the long term. "The damage comes if you metric everything in the short term and lose sight of the brand," she says. "It's a balancing act." Long-term brand activity can't be replaced by social media channels, where the audience comprises customers who are already interested or involved with the brand. Any marketer that attempts to enter a social network with a mass-marketing mentality will likely be ignored, she says -- a marketer's worst nightmare. Particularly in this economy, if people don't value the brand, they're more than happy to trade down for a better price.

"You still need ways to tell your story," Bradner says. With more channels available, marketers can now focus on listening more acutely to demand and augmenting their messages accordingly to foster intimacy. "What we are seeing is a focus on loyalty," she says. "and long-term customer relationships."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

Related Articles

What Marketers Can Learn From "Mad Men"

Social Ad Summit '09: How to make connections contagious and promote customer's passions. Deep Focus's Ian Schafer shares secrets behind the "Mad Men Yourself" campaign.

Social Media as a Direct Marketing Channel

The old techniques meet the new technology.

Direct Digital Marketing Benefits Companies and Consumers Alike

A strategy to improve marketing efficiency and customer loyalty.

Hello, I Love You

How CRM and advertising can help you court the best customers.

Employee Engagement Can't Thrive on Bonuses Alone

Financial services firms need to look at more than just monetary compensation to keep employees engaged, according to a new study.

Interactive Spending Expected to Rise to $55 Billion by 2014

Marketers are cutting costs and opting for cheaper, more measurable tactics.

Marketing More with Less

Achieve your goals with econometrics and optimization models.

Marketing Trends for 2009

"Customer satisfaction" and "customer retention" top the list for marketing executives.

Budgets Hold Steady (So Far), But Online Marketing Actually Expands

A focus on Web analytics and the ability to measure online marketing combine to counter the stress of a down economy.

How Much Marketing Is Too Much?

Whether marketers send messages across multiple channels or just one, every customer has a limit. The trick is knowing where that limit is.

Marketing: It's Nothing Personal

A report from the CMO Council reveals that personalization is a marketing force that isn't being fully utilized -- yet.

Marketing When Money Gets Tight

With talk of a recession forcing businesses to trim budgets, one expert advises a focus on "quick, inexpensive successes."