Seventy-one percent of global CMOs reported marketing budgets in 2009 are lower than budgets they had in 2008, and more than half (51%) have reported cuts of 20% or more, according to Forrester Research in its “Marketing Budgets Suffer Significant Cuts” report released July 7.
Traditional media, including direct mail, bear the brunt of the budget cuts, according to 45 CMOs surveyed who said their 2009 budgets were reduced. Fifty-two percent said they have decreased direct mail budgets. By contrast, 47% of CMOs indicated they have increased social media spending, 44% have increased investment in Web site development, 40% added to online ad spending, and 38% upped the budget for e-mail marketing.
One reason traditional budgets take it on the chin is their sheer size. “In many cases, it’s the largest bucket of funds marketers have,” said Lisa Bradner, senior analyst at Forrester. “You often go to the deep buckets where you have money when it is time to cut.” Another is the continued migration online by consumers. Marketers increasingly turn to those digital channels in order to reach their customers.
Of the reasons cited for spending reductions, 19% of the CMOs said direct mail budgets were cut because it delivers the lowest ROI. “I was surprised by that,” Bradner said. She added, “I think that also reflects the high cost of traditional direct mail.”
The researcher polled a total of 63 CMOs from its ongoing Marketing & Strategy Research Panel in an e-mail survey fielded in March.
