Promotional Marketing to Prosper in Tough Times

While a myriad of industries began the year by cutting or having marketing budgets slashed, those in promotional marketing can afford to be quietly optimistic. According to the Australasian Promotional Marketing Association’s (APMA’s) latest survey, 2009 is shaping up to be a strong year for the industry.

The online industry benchmark survey of APMA member agencies and their clients reveals that almost half of the promotional marketing industry expects marketing departments to increase or maintain their current level of spending on promotional marketing as the economy tightens.

In comparison, the vast majority of clients (66.7%) expect their marketing budgets to be decreased during the year ahead and befitting the challenging economic times, clients are measuring ROI based on profit (50%) and top-line revenue (37.5%).

“The results of the APMA Annual Industry Sentiment Survey point to the fact that the accountability, immediacy and cost-effectiveness of promotional marketing are increasingly appealing and relevant in the current climate when consumers are curbing their spending habits,” said Kylie Green, APMA Chairperson.

“Echoing the sentiments of the APMA’s findings are recent surveys out of the UK and US that have consistently shown that promotional marketing looks well placed to ride out this economic downturn better than most other disciplines. Leading UK economists have been quoted as saying that our industry is likely to win an increased share of the total marketing budget over the next 12 months, as companies increasingly switch to using very competitive promotions to win customers,” continued Kylie.

Other key findings of the APMA survey are that most clients allocated approximately 20-30% of their marketing budgets to either trade or consumer promotions, with some 20% devoting almost half (40-50%) of their annual marketing budget to these areas. The majority of clients (62.5%) have one rostered promotional agency on their books and when the time comes to part ways, the decisions will be equally driven by price (28.6%) and service (28.6%).

The APMA survey predicts that staffing will largely remain steady for the year ahead with 75% of clients and 41% of promotional agencies planning to keep the same staff levels. Even better news is that almost a quarter of promotional agencies are likely to increase staff for 2009.

Among the gloom, it appears that the promotional marketing industry may well see a silver lining in the recession storm clouds.