According to the July 2009 “CMO Survey” by Duke University’s Fuqua School of Business and the AMA, CMO’s are looking more hopeful coming out of a gloomy recession. The question that comes to mind now is, do ad agencies have adequate resources to take advantage of this upturn?
59% of the marketers who responded to the survey claimed to be more optimistic about the current economy than the preceding three months. A full 47% reported being more optimistic about revenues from end customers, however, they remain concerned about lagging customer spending.
While increased CMO confidence is great, the big question is just how will their optimistic attitude affect their spending behavior? According to survey respondents, their biggest increases in spending over the next twelve months will be online marketing at 9.5%, followed by new product introductions, CRM and brand building. While overall marketing budgets are expected to increase slightly, respondents reported that they plan to slash traditional ad spending by nearly 8%.
While this is clearly good news for some agencies, it may be less so for others. No matter what your agency discipline however, these numbers are a great barometer for agency management as it relates to which capabilities to focus on and invest in. Agencies have in the recent past trimmed down their resources significantly, almost to the point where they have little to no spare bandwidth to handle any proactive or developmental work.
While online is a very broad category and could probably have been predicted, growth in other areas like new product/service development, CRM and brand building could potentially be big opportunities for agencies of all disciplines.
Those agencies that have both a plan and the resources to help develop these potential opportunities will benefit from the upturn. Those who are caught by surprise are likely to miss the boat.