Marketers Will Weather Recession by Relying on More Immediate ROI: Ad Age

February 19th, 2008 Nurlan Urazbaev

The current economic downturn, call it recession or not, forces marketers to re-prioritize their media spend in favor of more measurable vehicles. Ad Age has talked to some top media buyers and sellers about how they expect to survive through the slowdown. I tried to summarize it below.

Network TV’s share will most likely keep shrinking in favor of cable, which offers lower CPM and better targeting.

Digital categories such as email and search will continue to be strong, regardless of the economy, with search marketing being the most recession-proof channel, because it is more measurable than other media and because it’s so closely tied to sales (especially in case of e-commerce). “Digital, in general, does not feel the effects initially because in tough economic times, there is a flight to measurable media,” said Bryan Wiener, CEO of digital agency 360i, in his interview to Ad Age.

Local radio spending will remain stable and might even benefit from the difficult times. Rex Conklin, media director of Wal-Mart Stores, said Wal-Mart already has started using radio for more efficient media spending in the wake of economic recession. “Particularly in a down economy, the advantages of radio are significant in that it’s very local and very flexible, which is incredibly important, especially when you’re talking about pricing.”

Newspapers face some pretty grim business trends, but the outlook will darken further in recession. “It will cut both ways,” said Jason Klein, president-CEO of the Newspaper National Network, a partnership of 24 newspaper companies that helps marketers place national buys. “It clearly is bad news for classified, which is not a good story in any economy for newspapers.” Help-wanted and real-estate listings in particular, which are already bruising papers by migrating to the web, will become scarcer in an economic downturn.

Magazines might need to rely on their web sites, according to Ad Age: “…web sites that can attract ad revenue even in tough times, partly because of low rates and partly because digital remains sexy to advertisers.”

Out-of-home — thanks to new digital and video technologies — has started to take a larger percentage of media budgets, beyond just a portion of what marketers set aside for nontraditional media. However, the potential economic downturn could leave the fate of some of those budgets in limbo. “I hope this recession doesn’t cause clients to exercise cancellation clauses,”Jack Sullivan, senior VP-out-of-home-media director for Starcom told Ad Age.

So-called shopper marketing already was booming, with Deloitte Consulting and the Grocery Manufacturers of Association projecting growth of 20% or more this year, but the downturn may not bring any extra boost, reports Ad Age.

“As consumers get more frugal, CPGs will shift their media to things that have a more immediate return on investment,” Mr. Garga said. “Shopper marketing is a captive audience in the store with an immediate effect. … Online is a medium, too, that supports more value-oriented messages.”

I would add that overall, digital signage, being the driver of growth behind both Out-of-home advertising and shopper marketing, is well-positioned to weather the storm. Such factors as slow but steady aggregation of digital signage ad space and development of standards and metrics are adding to its strength and will eventually make it easier for marketers to divert budgets from network TV and newspapers to this new medium.

Entry Filed under: Digital Signage ROI, The Big Picture, Uncategorized