Marketing budgets expected to rise despite economic woes

The year 2011 has seen some scary financial realities, such as stubbornly high unemployment ratings, the downgrade of U.S. credit and the helter-skelter movements of the stock market. While experts project a second-wave recession, others are expecting the worst of the financial crisis is behind us. Throughout all of this, big business executives seem to be in a quandary on which direction the market is ultimately going. An area in which they are expected to increase their spending is marketing. Despite the mixed economic messages, businesses are expected to increase their advertising and marketing budgets over the next year, and especially in the next three to six months as we approach the holiday and post-holiday retail season. Companies hope to generate a solid increase in revenue to produce growth that offsets the slowness in the markets earlier in the year.

Duke University's Fuqua School of Business recently released a CMO survey that underscores the importance of budgeting for further growth in the coming months. The survey, which was conducted in August, included 249 marketing executives. According to the respondents, new marketing hires are expected to increase by 7.2 percent over the next 12 months, and marketing budgets themselves are expected to rise by 9.1 percent in that same time frame. The survey responses indicate that, while many may fear the uncertain economy, the best way to fight it seems to be by investing in further advertising and marketing in order to encourage the purchases that will pull the country out of this slump.

"These results show that while executives feel the fear of all the doomsayers operating in the financial markets, these same executives are reporting positive performance gains and are spending despite the negative news," the director of the survey, Christine Moorman, told Media Business Magazine. "I conclude that these sources are closer to company operations, especially in revenue- and demand-generating activities like marketing, are trying to tell us that market reactions over the past month may have been grossly exaggerated."

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