Marketing Spending Could Be Economic Recovery Key

The weather outside was frightful and the forecasts were anything but delightful. Earlier this week as I sat in a meeting recounting the glum 2008 economic picture nationally and at home, the biggest winter storm to hit the Greater Cincinnati area in several years was raging outside.
As about half of the planned crowd of nearly 400 showed up I was reminded that many consumers may be sitting on the sidelines at home instead of doing their part to infuse capital into the US economy this year.

One of the key indicators that analysts outlined in this economic outloook program was consumer spending. When you think about it, marketing plays a key role in helping to drive folks to the cash register. All you have to do is look at what marketers did during the holiday season.

A study released by professional services firm BO Seidman LLP, and recounted in Marketing News, the publication of the American Marketing Association, 32 percent of retail Chief Marketing Officers reported their budgets shrank during the holidays. Forty three percent recounted a status quo on spending while 25 percent actually increased spending.

It's understandable that companies would question the advertising messaging in these difficult times (value added versus price or product benefits, for instance). But if retailers continue to cut marketing (or even other more cost-effective means of awareness-raising such as PR and social media tools) without taking into account the toll on reduced sales, this economic slump may go on well in 2010.