Magazine article Marketing

Mark Kleinman on Marketing and the City: Fight to Avoid the Cut

Magazine article Marketing

Mark Kleinman on Marketing and the City: Fight to Avoid the Cut

Article excerpt

The sprinkling of top marketers at the World Economic Forum must put the case for sustaining spend.

The stunning pistes of Klosters will be even busier than usual this week. As 2500 international business and political leaders gather for the annual World Economic Forum in nearby Davos, many will be tempted to abandon the unremitting talk of financial crisis for an afternoon on the slopes.

Sir Martin Sorrell, Maurice Levy and John Wren are unlikely to be among the fortunate escapees, however. The chief executives of WPP Group, Publicis Groupe and Omnicom - three of the global marketing services industry's 'Big Four' - will be in Davos, but far too busy persuading clients (both current and desired) not to slash their spending on brand-building campaigns during what is certain to be a torrid 2009.

This heavyweight triumvirate faces a tough task. With each passing week, the bottom of the economic slump appears paradoxically further away, and the calls on companies' precious cash reserves become ever-more urgent Conserving the dividend, paying essential suppliers and employees and servicing the debt burden have become priorities for bosses, many of whom have never before had to steer a company through a recession.

No wonder marketing professionals are fearful. Whether you work for a UK bank (in which case the government is likely to be or become your employer), a retailer, a car manufacturer or a travel company, looking your chief executive in the eye and asking them to sign off a major piece of brand-building activity must feel like professional suicide now.

We are already starting to see the grim effects of the contagion that has gripped the banking industry infecting marketing departments far beyond it. As this month's IPA Bellwether Report outlined, the advertising budget cuts recorded in the fourth quarter of last year are set to accelerate through 2009.

It is not hard to see where the cuts will come. Since November, high-street chains including major marketing spenders such as Woolworths have fallen into administration; in banking, expect Royal Bank of Scotland's logo to disappear from the sides of Formula One cars before long; and without some form of government financial assistance, it would be reasonable to assume that the marketing fire power of Jaguar and Land Rover will diminish.

The cost-cutting imperative is seizing control of chief executives, who are often buoyed by encouraging noises from shareholders. Some even appear to relish the opportunity. …

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