Economic Downturn Slices Corporate Marketing Budgets

American companies are tightening their advertising budgets and finding new ways to entice customers amid nationwide economic woes. MarketingSherpa’s 2008 “Marketing During an Economic Downturn” survey reports 60-percent of large companies are significantly shrinking traditional type marketing budgets this year.

“What happens is that the current economic crisis puts pressure on advertisers to save money and find more effective marketing channels,” said Karsten Weide, program director of Digital Marketplace and New Media at IDC.

While much of what is left of the marketing budget is being filtered into online media, traditional advertising like newspapers are facing the biggest dip in revenue in 50 years according to The Newspaper Association of America (NAA).

This advertising cutback is prompting many businesses to seek out cost-effective alternatives, such as PR, to build their small and mid-sized businesses into larger ones.

Although corporations may understand the power of public relations, many assume that a media-focused PR campaign is beyond their fiscal reach. This comes down to the fact that most traditional public relations firms charge hefty monthly retainers without offering any guaranteed results.

Yet, when it comes to PR the results are all that matter. Executives are demanding more bang out of every buck, with none of them wanting to pay for pitches that don’t pan out. At the end of the day, executives and decision makers need to know that their financial investment will be rewarded with a measurable return.

While most PR firms want to be paid for the entire campaign procedure, the philosophy of our firm is to only get paid for the media exposure we obtain. We developed a fee structure based on the delivery of radio and TV appearances, which forces daily focus on the end result instead of the process. Let’s face it. In this economy, when it comes to PR, clients are hungry for tangible results.

As said before, the current economic slump is forcing many companies to slash their marketing budget drastically. With a high demand for income, companies are employing new methods to generate quality leads and drive traffic to their websites.

One successful method is online marketing which has become a hotbed of activity in the promotion and sales of products. To survive in this “technology obsessed” marketplace, companies are not only fine tuning their existing websites but are also developing ecommerce sites and blogging to gain online visibility – in addition to using the “old” stand-by of online advertising.

But, with millions of websites in existence and staggering numbers of products being sold over the internet (rather than the brick and mortar stores) promoting your company and products online has become yet another marketing obstacle to overcome.

While search engine optimization (SEO), podcasting, vid-casting, blogging and social media marketing are all great online promotional tools, there is still the challenge of how to drive people directly to your website or to an online retail outlet to purchase your products.

And this is where publicity becomes more valuable than ever before. Publicity is a classic promotional tool that is (and always will be) your direct path to potential consumers. Imagine having live conversations with tens of thousands, and in some cases millions, of people telling them to check out your website and order your products online! What could be better?

A growing number of marketing departments and CEOs across the nation are sitting up and taking notice. In these critical economic times, marketing dollars are a precious commodity and must be invested wisely.

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