McKinsey: only 45% of companies say they will decrease their marketing spending in the next 12 months

I received today McKinsey’s survey on „Measuring marketing”. The survey was in the field in January 2009 and generated responses from 587 C-level executives representing the full range of industries and regions.

It was not quite surprising to find out that many companies, as the survey shows, don’t use basic best practices such as clearly allocating (or even defining) marketing spending across the whole company or regularly reviewing the results. Further, companies typically allocate their marketing budgets based on historical allocation levels and product-level priorities, rather than campaign effectiveness or the goals of the company as a whole.

The survey results begin to quantify another bit of common wisdom: consumer-focused companies are stronger marketers. Indeed, the results show that these types of companies are much likelier to use most of the best practices. Further, though reaction to the economic downturn is varied, consumer-focused companies are more likely than others to be planning to increase their marketing spending. Regardless of where they focus, companies that use best practices (such as ensuring that marketing spending is clearly allocated and well understood across the whole company) are also likelier than others to have plans to increase their spending.

According to McKinsey, nearly three-quarters of all companies are cutting operating costs in response to the global economic turmoil. However, the survey shows that marketing isn’t as hard hit: only 45% of companies said that they will decrease their marketing spending in the next 12 months, while 20% expect an increase. Executives at consumer-focused companies are far more likely to say their companies will increase their spending than executives at companies focused on selling to other businesses.

Among the companies that plan to decrease their marketing spending, 40% are making across-the-board cuts. Comparing all responses with those at companies where marketing spending is clearly allocated and understood across the company highlights that companies in the latter group make cuts that are more targeted, and, almost certainly, more effective.

You may download the full report from:
http://www.mckinseyquarterly.com/Marketing/Strategy/

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