US: One third of retailers cut advertising budgets

9 December 2008 | Source: just-food.com

One-third of chief marketing officers (CMOs) at leading US retailers said that their marketing and advertising budgets have been reduced this season, according to new research.

The study, conducted after the financial market meltdown by BDO Seidman, stated that nearly half (43%) of the retailers say their budget will remain "flat" and only a quarter (25%) cite an increase in advertising and marketing spending this season.

Most of the retailers (57%) will spend the majority of their advertising and marketing budget on print advertising, while 21% will focus on broadcast outlets and 19% on Internet advertising, including social networking sites.

Indicative of an increased interest in going green, 43% of retailers will be increasing their advertising and marketing focus on green products this holiday season, which is up from 37% in 2007, Seidman said.

"The recessionary climate has caused retailers to cut back in many ways, and advertising budgets are among the first items retailers consider when reducing spending," said Catherine Fox-Simpson, partner in the retail and consumer product practice of BDO Seidman. "This holiday season, we can expect that advertising buys will be very targeted, and in some cases more conservative. Historically, in tough times, campaigns become less flashy, more sentimental and heavily focused on value-added items, such as sustainable products."

The findings are from the most recent edition of The BDO Seidman Retail Compass Survey, which questioned 100 chief marketing officers at leading retailers throughout the country.