ACCOUNTABILITY THE TOP ISSUE FACING …networksales.news.com.au/marketing/pdf/NDM_DIR_No4_JUL...ACCOUNTABILITY THE TOP ISSUE FACING MARKETERS TODAY July 2009 News Digital Media Insight

A quarterly analysis of online sentiment

ACCOUNTABILITY THE TOP ISSUE FACING MARKETERS TODAY

July 2009

News Digital Media Insight Report

A quarterly analysis of online sentimentNews Digital Media Insight Report

Introduction

Budgets are under increasing pressure. Companies are looking for innovative and cost effective ways to spend their shrinking marketing budgets. We are all trying to do more with less.

Australia’s leading digital publisher, News Digital Media, has commissioned research of more than 288 marketing professionals across Australia on current market sentiment and future marketing plans.

The study conducted by research company, Core Data, revealed accountability for marketing expenditure is one of the most important strategic issues facing business today.

The report found the economic downturn has resulted in:

Marketers experiencing greater scrutiny from management •

A more frequent monitoring of marketing activity by management •

Changing objectives set by management •

Truncated marketing planning cycles •

Budget cuts driving changes to the media mix•

A continuing migration from traditional to online media•

Further, the study found positive attitudes from marketers towards their online presence as it provides more accountability for expenditure than more traditional mediums.

The digital platform is providing marketers with alacrity to respond to increasing pressure from management in a wary commercial environment. The report also reveals that marketers are not alone. More scrutiny and pressure from management is a challenge we all share. The need for brands to differentiate themselves from competitors has never been more urgent.

There is an opportunity for marketers to demonstrate how creativity, innovation and adaptability can delight the toughest management boards.

News Digital Media surveyed 288 marketing professionals between April 27, 2009 and May 11, 2009.

For media enquiries about the News Digital Media Insight report, please contactKate McQuestin, corporate communications manager, News Digital Media on 02 8114 7552 or 0419 591 150

3


Marketers face greater accountability and scrutiny from management

The economic downturn was perceived as leading to greater requirements for accountability with more scrutiny from management and less advertising spend for most.

The majority of marketers (61 per cent) felt they were required to show more accountability in their decision making as a result of the downturn.

The economic downturn has also led to more frequent monitoring of marketing success for most marketers (60 per cent).

61%29%

10%

Yes No Unsure

Are you required to show more accountability in your decision making as a result of the downturn?

60%28%

12%

Yes No Unsure

Is there more frequent monitoring of the success of your marketing activity as a result of the downturn?


4


Marketers face greater accountability and scrutiny from management

57%40%

3%

Yes No Unsure

Have you moved from longer term reporting to shorter term, such as from quarterly reporting to monthly or weekly?

Reporting cycles have become shorter term for most marketers (57 per cent).

This move from longer term reporting to shorter term reporting has seen cost per sale heavily monitored (38 per cent), more stages of sign off (27 per cent) and increased use of return on investment metrics (25 per cent). Please refer to chart on page 5.

In addition to working within shorter planning cycles, most marketers (59 per cent) felt they were being given different objectives or instructions by management as a result of the downturn.

Are you being given different objectives or instructions by management as a result of the downturn?

59%34%

7%

Yes No Unsure


5


Objectives and instructions from management changing

For those marketers who indicated different objectives or instructions as a result of the downturn, the majority were subject to more scrutiny (56 per cent) and were not replacing staff who leave (53 per cent).

What different objectives or instructions are you being given by management as a result of the downturn?

56

53

48

38

38

28

27

25

22

20

18

17

17

16

15

7

0 10 20 30 40 50 60

Subject to more scrutiny

Not replacing staff who leave

Reducing spend on brandadvertising or marketing

Move to lower risk strategies

Cost per sale heavily monitored

Retrenchments

More stages for sign off

Increased use of return ofinvestment metrics

New brand launches being put onhold

Increasing use of pricepromotions

Increased focus on pricingproduct strategies

Bringing functions in-house

Shifting focus to acquisitioncampaigns

Cutting back on market research

Increasing market researchbefore making a decision

Outsourcing of functions

%

Marketers are reducing their spend on brand advertising or marketing (48 per cent) with many putting new brand launches on hold (22 per cent). They are moving to lower risk strategies (38 per cent). Pricing has become a more important lever in the economic downturn with an increased use or price promotions (20 per cent) and an increased focus on pricing product strategies (18 per cent). 17 per cent of marketers are bringing functions in house. There were mixed feelings about the role market research plays in the economic downturn with 16 per cent cutting back on market research, while 15 per cent were increasing market research before making a decision.


6


Objectives and instructions from management changing

Marketers being required to show greater accountability were also more likely to be given different objectives (72 per cent of this group) than those marketers who are not being required to show greater accountability (31 per cent).

Shortened planning cycles are also more prevalent amongst those marketers being required to show greater accountability (49 per cent of this group) compared to those marketers not being required to show greater accountability (20 per cent).

Change in objectives by increase in accountability Shortened planning cycles by increase in accountability

5%

2%

Yes No

67%

31%

23%

72%

Increased Accountability?

Yes No Unsure Cycles Shorter Unsure Cycles Not Shorter

Yes No

75%

20%

6%

39%

49%

12%

Increased Accountability?


7


Shortened planning cycles by increase in accountability

Mixed feelings about shorter term objectives

Do you think that focus on short term objectives will damage your brand/s in the long term?

However, over a third of marketers feel the shorter term objectives will potentially damage brands in the long term. The shift to shorter term objectives was seen as damaging to their brands in the longer term by 35 per cent of the marketers, somewhat more than who thought there was no damage (25 per cent).

8

41

21

4

27

0

10

20

30

40

50

Strongly agree Agree Neither agree nordisagree

Disagree Strongly disagree

%


8


Marketing planning cycles are contracting

Marketing planning cycles have contracted with 38 per cent saying their planning cycle has become shorter as a result of the economic downturn.

92 per cent of marketing plans are less than 12 months. The diminishing length of marketing plans is evident from the fact that 81 per cent of respondents’ previous marketing plans were between 6-18 months which has now dropped to only 29 per cent. Plans spanning less than 6 months have grown from representing 9 per cent to 66 per cent of the marketers.

As already shown on page 6, shortened planning cycles are more prevalent amongst those marketers being required to show greater accountability.

Has your marketing planning cycle become shorter as a result of the downturn?

Changes in length of marketing plans

38%

47%

15%

Yes No Unsure

9 9

49

32

66

26

3 5

0

10

20

30

40

50

60

70

Less than 6months

6 months toless than 12

months

12 months toless than 18

months

18 months to3 years or more

%

Previous marketing plan

Current marketing plan


9


Budgets are being cut

62 per cent of marketers have experienced marketing budget cuts in the current financial year as a result of the economic downturn.

Have you personally experienced marketing budget cuts in the current financial year as a result of the economic downturn?

62%

38%

Yes No


10


Budgets cut by reduction in planning cycles

Budget Cut No Budget Cut

Yes NoUnsure

53%

47%

48%

52%

17%

83%

Shortened Planning Cycles?

Budgets are being cut

Budgets cuts have been significantly more prevalent amongst those marketers who have experienced other impacts of the current economic downturn:

75 per cent• of marketers being required to show more

accountability have experienced budget cuts compared to

40 per cent of marketers who have not been required to show

more accountability

76 per cent• of marketers being given different objectives have

also experienced budget cuts compared to 42 per cent of

marketers who have not been given different objectives

83 per cent • of marketers now operating with shorter planning cycles have experienced budget cuts compared to

47 per cent of marketers who are not operating with shorter planning cycles.


11


Media mix changing with migration to online continuing

Changes in media mix used has seen most mediums, apparently lose ground to online, for which 75 per cent of marketers are already allocating relatively more budget to online as a result of budget cuts. 30 per cent had already committed a lot more to online. Only 9 per cent had allocated relatively less to online in their media mix for advertising spend, comparing very well to all other mediums.

How has the mix of media you are using for marketing already changed as a result of budget cuts?

33

21

6

34

21

23

21

20

33

34

17

24

33

31

15

63

37

31

28 28

17

328

45

28

17

21

30

17

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

TV Radio Online Newspapers Magazines Outdoor PR Direct Mail

Much less A bit less Same A bit more A lot more

7 3 37

21

7

17

28

28


12


Creativity and innovation key to success

A strong opportunity exists for targeted advertising

As management requires greater accountability from its marketers during the economic downturn, internet users are voicing a need for companies to develop creative and innovative campaigns to avoid detrimental effects on the brand.

In a recent survey conducted by News Digital Media of more than 7,000 people, 63 per cent of respondents have complained about a particularly annoying online advertisement. However, most do not report a particularly annoying advertisement to the advertiser, publisher or government body, instead they tell their friends, family and colleagues.

The survey also revealed a strong opportunity exists for targeted advertising with 45 per cent of respondents saying they would prefer to receive online ads that are targeted to their interests. This is nearly double the amount of respondents that did not prefer to receive online ads that are targeted to their interests

Friends and Family

Colleagues

Website

Authority

Advertiser

Other

60%

47%

6%

6%

5%

4%

Channels For Complaint About Annoying Online Advertisments

I Prefer To Receive Online Ads That Are Targeted To My Interests

Per centage of respondents

Strongly agree 7%

Agree 38%

Neither disagree nor agree 32%

Disagree 14%

Strongly Disagree 9%

* Source: News Digital Media’s Insight Report – Connecting Campaigns•

13


Profile of Respondents

Respondents were mostly between 20 and 50 yrs old, with slightly more females than males.

The respondents filled a broad range of marketing roles but were predominately marketing managers (28 per cent),

directors (14 per cent) or coordinators (10 per cent).

79 per cent of respondents’ household income was above $75,000 per year.

To advertise on the News Digital Media network

Email [email protected] Danny Bass 02 8114 7400VIC Jonathan Smith 03 9292 1203QLD Sheridan Comino 07 3666 6458SA Stuart Pool 08 8206 2446WA Sue Yip 08 9926 8342

News Digital Media’s Insights Report – Accountability the top issue facing marketers today – is based on the findings of an online poll of 288 respondents in marketing roles sourced from Brand Management, News Digital and Postclick databases/website traffic. The survey was carried out between April 27 – May 11, 2009.

Documents

ACCOUNTABILITY THE TOP ISSUE FACING …networksales.news.com.au/marketing/pdf/NDM_DIR_No4_JUL...ACCOUNTABILITY THE TOP ISSUE FACING MARKETERS TODAY July 2009 News Digital Media Insight