Marketers start to 'think smart'
Professionals urged to look hard at how they can offer better service, and new ways to use existing skills. Reports by Neil Runcieman

Experts argue that companies which cut their marketing spend during the average 11-month duration of a recession take at least two years to catch up

Recession is a virtual guarantee of cutbacks, cancelled projects and, inevitably, layoffs, especially for marketing professionals in companies or with agencies trying to sell that company's products. So what can marketers do to make sure they carry on generating numbers instead of becoming just another one of them?

There are many well-documented reasons why companies must not cut marketing budgets during a recession. Statistically, the experts argue, companies that reduce their marketing spend during the average 11-month duration of a recession take at least two years and huge additional investment to catch up.

Equally, when sales are harder to come by, more marketing will drive better market share and bolster flagging revenues.

What you must on no account do, all the experts agree, is fail to invest in your brand.

Ian Harling founded Firstline, a design and advertising agency, in Hong Kong in 1988. He has since ridden out every recession, economic downturn and blue-moon crisis that has been thrown at him, from the 1997 Asian financial crisis, through the dotcom slump to Sars. This time, though, he feels it is different.

"This is the worst we've had to face, without a doubt," he said. "The financial crisis and Sars were horrible, but they were local. This is global and nobody knows when it's going to end. For my company, by late last year, there was no way I could justify maintaining the scale and cost of the operation I had in place."

Mr Harling opted to make draconian reductions and move to a smaller office. "Times like this are not about strategic development plans and long-term growth strategies, they're about survival, pure and simple. You have to take hard decisions, and the sooner the better. By November it was clear the market was falling apart. We weren't getting the inquiries we would usually have and our long-term clients were doing less. Frankly, it wasn't a difficult choice. It would have been madness to try to hang on in blind hopes of something turning up to save the day."

For Silvia Cheng Pui-man, account director for the Hong Kong office of Chandelier Creative, a New York-headquartered advertising and design agency, the situation was virtually identical.

"The first signs you see are reduction in advertising spend. Clients who would have had 20 media placements suddenly only want 10. Then events get hit, too. Mostly, the client doesn't cancel the event, but the scale and cost are radically reduced. It's the same for all one-off projects. If you want one perfect example, we were working with a large department store on a high-value, quality-printed catalogue. By the time we finished the project, it had been downgraded to a poster."

Chandelier also decided to contract and consolidate, reducing the size of the Hong Kong operation and concentrating on servicing existing clients.

"Before the crunch hit we were busy in Hong Kong, with a clear plan to expand into China. All of that is on hold now. That doesn't mean that the company has abandoned the plan. But, with the situation the way it is and all the experts predicting a long downturn, the only option is zero-risk."

Globally, all of the big four media groups (Omnicom, WPP, Publicis and Interpublic) have resigned themselves to falling revenues in "traditional" media in the developed countries: TV and print ad campaigns and media buying.

Omnicom announced 5 per cent layoffs globally. WPP's Martin Sorrell confirmed there would be (as yet unquantified) job cuts and it would be a considerable surprise if the others did not follow suit. The only areas offering hope to the industry are the developing nations (particularly China and India) and online-based marketing.

Mr Harling said: "Online is growing much faster now. For one thing you don't have the print cost - and the associated media buying rates tend to be much lower - and for another it's measurable. CFOs like that because they can justify an investment through RoI [return on investment] rather than 'It was a really cool campaign and the agency won lots of awards'."

As for marketing professionals who have either already lost their jobs or fear they may be about to, Mr Harling's advice is to take the same approach to your career as the agencies have to take to saving their businesses.

"Work every contact and lead that you've got, look very hard at how you can offer extra or better service, look for new ways to use the skills you have, and maintain your brand integrity - especially when the brand you're selling is yourself. After all, you've got more time to think about what to do now - so think smart."

Ms Cheng echoes the sentiment and recommends investing in yourself even when others won't invest in you.

"A lot of fellow marketing professionals in Hong Kong have already lost their jobs. Others have been relocated to other departments. They're the lucky ones. I had already started a part-time MBA, so now I'll focus more on that. The goal is to be better placed when the economy starts growing again and companies suddenly need to find well-qualified, experienced professionals."

Mr Harling has seen some improvements at Firstline since the Lunar New Year.

"We're getting more inquiries for new work, and we're developing new services for start-up and smaller companies. In some ways, having to scale back the company has left me feeling more optimistic for the future. Like they say: 'Whatever doesn't kill you makes you stronger'."

SCMP
4th March, 2009

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