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Marketing Death Watch The Million Dollar Question; Do I Cut Back On Marketing? By Vanessa Horwell, Chief Visibility Advisor, ThinkInk I recently read an article in Advertising Age that echoed what I’ve been thinking about for a while. It talked about how this rough time is an opportunity for businesses to redefine the meaning of capitalism. To me, I see this as a time to return to, or better still, reinvent a new value system that is based less on conspicuous consumption and more about providing meaning and value in people’s lives. This is a time to make our businesses better, stronger and more purposeful. The article also talks about long-term tangible ideals that we as a society must embrace now, otherwise we’ll just fall prey to inertia and apathy - again. But that’s the long view. What do we do in the short term that will propel our businesses forward so they flourish not languish, or worse, vanish? One of the many reasons we’re in this mess is because a lot of businesses are broken. Bloated, layered, inefficient and too slow to respond to market changes. Think about this: if we head into 2009 with the same business model thinking that we’ll be ok by simple cutting costs and putting plans for growth, innovation and advertising aside, we’re only delaying the inevitable. We all know about the auto industry, so let’s use the newspaper industry as another example. The proverbial writing on the wall actually happened more than two years ago, but nothing really changed. Newspapers developed an online presence but nothing happened to their revenue model. So what we’re seeing today are the consequences of sluggishness, poor decision making and a lack of willingness to change a business and advertising model before it was too late. People changed the way they consumed media, but the newspapers didn’t change with them. Tribune filed for Chapter 11 last week, cash strapped McClatchy is hanging on by a thread and NYT’s Arthur Sulzberger Jr. says “advertising revenues at both the paper and the Web site remain weak and the financial outlook for 2009 is daunting”. For some companies, no amount of bloodletting will help now because they’re too far gone and no longer sustainable. But when companies stop marketing and advertising, they are feeding the monster of self-destruction. Certainly, marketers and businesses across all industries are faced with the same dilemma. If you cut costs, which ones? If you cut back on staff (experienced or less senior?), how can you continue delivering top-notch service to your customers? If you cut back on marketing, how will customers know that you’re still in play and not go directly to your competitor instead? Will such cost-cutting ultimately help your business? Many businesses and retailers have answered these questions, instinctively, by cutting back across the board, marketing included. But this slash’n’burn approach will turn out to be a very costly mistake, especially for retailers. It’s a mistake because marketing should be part of a company’s long term-term strategic plan. Marketing drives revenues; therefore it is not discretionary as CFOs would have us believe. It is a tough situation in any vertical because at the end of the day, the bottom line is the driver behind budget cuts. But when we use only our left brain to make business decisions, there’s a great danger that we’ll cut out marketing altogether.

For me, this dilemma signifies something as important as the budget cuts themselves. Marketers, CMO’s and everyone involved in the outlay of marketing dollars should be asking themselves; are we giving our customers what they need right now? How can we do more for less? How can our advertising be most effective with fewer resources available? How can we not make the same mistakes of the past? How can we maintain a competitive advantage? Those are questions I asked myself not long ago, when considering my company’s current and future position. Yes, there were some lay-offs, but more hires too. We put several projects on hold and we didn’t make any capital investments. We reassessed our client base and pulled out of industries that would not support our growth. We redefined our value to customers, we reassessed what needing doing to keep our existing ones more than happy, and find new ones. And what we also did was significantly increase our visibility, and aggressively. We devised new strategies, and started using new mediums to market ourselves. Cutting back on marketing has been the farthest thing on our mind. Don’t be immobilized by fear. Don’t cut back on marketing. Despite challenging times ahead and the catch-22 scenario, brands must remain highly visible, relevant and connected with their customers. Marketing is a brand’s face to the world and vital to business survival – especially during a recession. Marketing drives sales, so cutting back will have the reverse effect. Right now, marketers should be spending the same – if not more – to make sure they are on the radar of those consumers who are still spending. Consumers and businesses don't stop buying and selling during a recession, there’s just less to go around. So the challenge is to spend those marketing dollars more wisely, not less. Instead of doing what others are doing (including competitors) take this time to make changes in strategies and mix, to explore new mediums and channels, to innovate and think creatively. It is not the time to put business or marketing on hold. If you don’t believe me, a McGraw-Hill study showed that companies who continued or increased their marketing spend during the last recession had 256% higher sales than the companies who chose to cut, or halt their marketing budgets. Their sales after the economic recovery were a lot higher too. But the companies that went into hibernation and tried to reestablish their brand position after recovery, paid 4-5 times the amount “saved” by cutting the advertising budget. Take that CFOs. Don’t do more of the same. Many marketing initiatives come with a lot of baggage, an inherent mandate to push customers and cling to old ways. Instead, engage in effective relationship-building campaigns. Any marketer who walks a mile in their customers’ shoes will be more in touch with who they are, how they receive messages, what they actually want, leaving them in a better position to deliver the value that attracts more business. Think value, think trust. This is the time for marketers to get out of their comfort zones and adapt their programs ready for change. New times bring new problems requiring new solutions, so the answer is to focus on the efficiency and efficacy of marketing initiatives; to rethink the nature of marketing efforts and to attempt new and nontraditional methods to capture a more willing segment of the market. Today’s consumer wants to adopt a message, not be exposed to an advertisement. They want meaning. They desire conversations rather than commercials. They’re tuning out from traditional advertising, so we’re seeing some clever marketers redefine the very nature of advertising – by being where their customers are - mobile and social. Social media and mobile advertising can help brands change the way

their efforts are perceived, reach out to very targeted audiences in a way that traditional advertising cannot, and can provide more impact and penetration for far less cost, immediately. Consider the Bionic Man affect – “let’s build it stronger, faster, more powerful. We can rebuild it — we have the technology." Marketing is in the process of evolving to meet changing demographics and a changing consumer purchasing mindset. Maybe we’ve stumbled upon marketing 3.0 and don’t know it yet? What’s important is to use new technology and methods to bridge the gap that traditional marketing has left wide open between brands and customers. While it’s still early days for advertising on social platforms, and mobile has just passed the terrible twos phase and is heading towards puberty, it is times like these that marketers will discover and turn to new channels, albeit through necessity. Don’t forget the meaning of mar·ket·ing n. 1. The commercial functions involved in transferring goods from producer to consumer. 2. The act of creating a need, or posing a problem then swiftly offering the ideal solution. More than ever before marketers have the means to really listen to what their audiences are saying. “If you build it, they will come” is rapidly being updated to, “If they tell you what to build, build it.” It takes courage and a view of the big picture to continue to spend on marketing during tough times. There may be less to go around, but people are still spending. (Black Friday showed a 7.2% increase per shopper over last year, according to the NRF.) Opportunity is knocking for those marketers willing to see these costs as an investment, not an expense, and to invest in themselves and their brand. The odds and statistics are on their side, for a change. New challenges bring new opportunities. The slowdown affects different businesses in different ways, but this change in operating environment is the ideal time to reallocate your marketing dollars to the most effective mediums. Do whatever it takes. Just don’t walk away from this opportunity we’ve been given to recreate our future. Because in a world without marketing, the conversation with your customers simply ends. Cut. Vanessa Horwell is Chief Visibility Officer at ThinkInk. She works with companies in the US, UK and Europe to improve their visibility through strategic public relations and new media channels. Reach her at