Gloomy Outlook For Marketers
The marketing profession is predicting a gloomy outlook for the industry, forecasting declines and radical cut backs in expenditure, according to the latest survey results from the Chartered Institute of Marketing (CIM).
Of the 14 industrial and commercial sectors covered by the survey, at least half of respondents describe their current year’s sales plan as ‘very challenging’ or ‘unrealistic’. In the retail sector, nearly two thirds of respondents see their plans as ‘very challenging’.
Marketers’ negative comments have resulted in the CIM confidence index, which compares sales plans with marketers belief in their likelihood of achieving those plans, falling dramatically since this time last year (see Analysis Of Ad Figures Reveals Recovery May Not Yet Be Here).
The down-beat attitude is reflected in marketers’ expectations about budget increases, with UK firms planning to increase their marketing spend by just 2.9%, a significant decrease on the 4.9% rise predicted in the previous survey last quarter (see Little Sign Of Recession, Says CIM Study).
The largest growth in spending is expected in promotions and direct mail, with expenditure predicted to rise by 3%. These figures are still down on the estimates in the Winter Survey, with sponsorship likely to fare the worst, and spend forecast to fall by 0.2% over the next twelve months.
Over half of UK marketing departments are predicted to stay the same size, and a third are likely to increase. However, while 31% of those taking part in the survey said that they are likely to increase the size of their marketing operations within a year, this figure has declined from nearly half, 47%, in the 2004 Summer Survey.
Commenting on the findings, Douglas McWilliams, economic adviser to the CIM and chief executive of the centre for economics and business research said: “After a nine year consumer boom, the combination of higher interest rates, increasing debt and a flattening housing market seem to be starting to feed through.”
He continued: “So far, the UK economy has kept moving forward, partly on the back of rising government spending, partly on the continuing construction boom, and partly because of business to business sales remaining strong. But it appears that at least the marketing component of business to business sales is set to turn down as the year goes on.”
Paul Gostick, international chairman of the CIM was more optimistic, pointing out that there are ways that marketing practitioners can improve their prospects for success.
He said: “As budgets come under increased pressure, it is more important than ever for marketers to keep abreast of current thinking to ensure they continue to deliver maximum value. The well qualified professional marketer will be best placed to thrive in more demanding economic conditions.”