Survey predicts rise in marketing spend, with bigger slice of the pie for PR and Experiential

Based on a survey of 147 of the country’s leading marketers, New Zealand businesses are planning to spend more on marketing this year. And PR and experiential came out as the big winners over more ‘traditional’ forms of advertising. But difficulties around ensuring accurate measurement are still hampering the sector’s growth.

Commissioned by the CAANZ Marcomms Leadership Group (MLG) and the Marketing Association, the Buzz Channel survey asked respondents how they planned to split their marketing budget in 2011 (29 percent of respondents had a marketing budget of $100,001-$500,000, and 44 percent had a marketing budget of over $500,000).

One third of the respondents said they were increasing spend on PR, experiential and events (marcomms activities) at the expense of paid advertising. Nearly 45 percent said the split for 2011 would be the same and only eight percent considered spending more on advertising at the expense of marcomms. Over half of respondents said marcomms was used because that was how consumers wanted to be communicated with.

Designed to test the belief held by many marketers that the PR and experiential sector was growing, the survey gathered answers from marketing professionals across a range of sectors including FMCG, Government/public sector, retail, financial services, telecommunications and health and fitness.

Experiential marketing shows the biggest signs of growth, with almost half saying they will use experiential marketing in their next financial year, a 42 percent increase on the previous year. Over half of the respondents have used public relations as part of their marketing activity in the past year and more than three quarters have used events.

“Nearly all respondents agreed there is a strong role for multi-layered disciplines in the marketing mix, and it’s obvious from the results that there is an increasing appetite for both PR and Experiential, ” says Sue McCarty, chief executive of the Marketing Association. “Having said that, even though 39 percent agree that marcomms has proved to generate better return on investment than advertising over the last year, over half agree that it suffers due to the lack of agreed measures. As well, nearly 30 percent of respondents expressed difficulty measuring experiential, showing there is a real gap in this area.”

Respondents also said delivering ROI against a limited budget was the biggest challenge facing marketers in this country. Other challenges include an increasingly competitive marketplace and encouraging more non-traditional marketing activity.

CAANZ chief executive Rick Osborne, who’s soon to depart for the milky shores of Fonterra, says even though almost eighty percent of respondents used marcomms activities as an effective way to influence their customers, marketers need to ensure all parties agree on a set of effective measurement metrics at the beginning of a campaign.

“We also encourage marketers to allocate the resources and necessary investment to accurately measure outputs of PR/Experiential activities and therefore derive maximum value.”

Additional findings:

  • 36 percent of respondents will increase their marketing budget this financial year compared to last, while only 19 percent will be spending less than last year.
  • 78 percent of respondents use marcomms activities as an effective way to influence their customers and 54 percent will use them because its how their consumers want to be communicated to.
  • 51 percent of respondents agree or strongly agree that marcomms suffers due to lack of agreed ROI measures (28 percent neither agree nor disagree).

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