Right about now, the Global Financial Crisis has probably hit most companies marketing budgets, with CEO’s tightening the belt on expenses as their revenue lines come down. Prudently these chief executives seek to bring costs into line with revenues.
A study by the Aberdeen Group, a Harte-Hanks company, found ‘82% of companies have reallocated their planned marketing spend for 2009 to varying degrees on account of the recession.’
The Aberdeen analyst continues with what would seem to be the bleeding obvious: ‘Companies need to ensure that they’re allocating their limited marketing funds in the most productive ways possible … In other cases, companies are actually investing more aggressively in various types of marketing programs, sensing an opportunity to capitalize on the grim economic headlines.’
So for PR managers across the globe this means that marketers are probably beating a direct path to their doorstep looking to leverage ‘free PR’ to augment their dwindling demand generation dollars. This is good news.
It’s good because like the Marines, PR comes to the rescue and to the forefront of marketers’ consciousness. It’s good because PR executed and managed correctly can do enormous good for awareness, consideration and preference. And finally it’s good because social media is the next black and PR as a discipline is primed and ready to take to this new vehicle with a vengeance.
Smart PR managers will be evaluating and prioritizing their core dollars and then looking to see how they can maximize and deliver results on the incremental dollars that some of the marketing folks will bring to the table. The even smarter ones will start to factor into their PR programs effectiveness metrics and will be able to provide a correlation between the campaign or program spend and execution and whatever pre-determined measures were agreed with the marketing folks. That then provides clear accountability and enables PR to talk the marketing talk and walk it at the same time.
Unlike traditional media, social media metrics provide a fantastic opportunity to highlight PR ROI, if done correctly. Linking back a PR-specific program to traffic, or eyeballs or community conversations can be easier (and cheaper) than the more traditional qual and quant analyses of print and broadcast media. There are powerful online tools that allow you to do this and even automate the reporting.
All in all, now is a great time to be in PR.
We (Ogilvy PR’s tech practice) often hear from business to business technology marketers and tech PR professionals looking for a better understanding of Government – selling to it, benefiting from stimulus spending, and how the regulatory environment may evolve. I want to share a great piece that our Ogilvy Government Relations team has developed. Having access to thinking like this is one of the things I love about working at a full-service firm that knows tech PR but thinks far beyond.
For any of you with an interest in marketing products and services to the federal government, please take a look at these tips on how to build a stable and thriving federal sales market.
Selling to the Federal Market: Complications and Opportunities
With declining commercial sales and an uncertain economic climate, many tech and IT companies are looking to the one certain growth market in today’s economy – the federal government. Given the growth in federal spending projected over the next four years in every area from healthcare to border security, there is no doubt that federal agencies will continue to procure record amounts of IT services and equipment.
However, selling in this market can often be a frustrating dead end for companies not attune to doing business with the government. Most adventures in government sales for the uninitiated bear little fruit for many years. The most frequent refrain from disappointed vendors is that the government could not “see the wisdom or merits of their technology or services.”
There are ways to build a stable and thriving federal sales market, but it takes commitment, time, money and savvy to realize that goal. Below are a few tips for those looking to break into the federal market or to significantly expand their presence.
1) Know Your Market and Capabilities – Whether it is health IT, communications, data storage and retrieval, or complex systems integration, you must have active intelligence of federal opportunities before word hits the street. This task requires active knowledge of agency plans for future budget cycles, agency requirements and Executive Branch and Congressional Initiatives. Furthermore, you must know whether your technology aligns with that particular need and is either competitive or can represent best value to the government.
2) Be in Your Market – Simply coming to Washington from the home office, armed with minimal intelligence to meet with a government official is totally ineffective. At best you will get a meeting. At worst, you will be regarded as an outsider with an unproven track record. Government purchasers are loathe to trust the untested and unknown. Without a consistent physical presence in Washington, you will never gain the trust of careerists whose futures depend on making the right decisions.
3) Staff Up – To be successful at both step one and two, a company must have a dedicated federal sales force and a lobbying team to open doors and provide intelligence on an almost daily basis. In addition, the company must have employees who have experience in the complex world of government contracting and requirements, and relationships with agencies that they have worked for or with in the past. This is a particular type of expertise that is no different from that of a software engineer or other technician and it can prove invaluable in winning contracts.
4) Team Up – Often the easiest way to win government business is to team with larger corporations or trusted government service providers who already have large, flexible contracts in place with agencies. Going after large contracts with major players as a sub can get the company in the door and begin building relationships for future opportunities.
5) Brand, Brand, Brand – As noted above, lack of familiarity in Washington breeds contempt. A company in the federal market must be able to tout not only its name and technology, but its past and present performance as a government contractor. Again, without the commitment to advertise and use public relations in the federal sales arena, few government purchasers will feel comfortable enough to take a chance on an unknown vendor.
It must be research season. The latest report to hit the streets down under is the annual Grey’s Eye on Australia report, conducted by Sweeney Research. Whilst some of this makes for interesting reading, I think it also states the obvious. Not surprisingly, it focuses on consumer attitudes about the recession and how people are feeling.
Reassuringly, despite the gloom, almost two-thirds of Aussies are “extremely” or “very” satisfied with life, despite rising unemployment and a greater focus on personal finances. Perhaps the Rudd Government’s decision in February to hand out wads of cash to a large proportion of the Australian population had something to do with that!
Grey director of planning, Simon Rich, said in the company’s press release: “For most Australians, life is still OK. Interest rates are low, the cost of petrol is declining and unemployment has not yet reached crisis levels. So, we’re positive about today but concerned about what the future may hold and as a result we’re cutting back expenses and holding off on big ticket purchases.”
I don’t know what is happening in other parts of the world; do you all share Simon’s views?
In an effort to save cash, the purchase of luxury items is waning and consumers have returned to home brand goods. This report showed only 9% of consumers do not purchase house brands, and 41% are buying more than they did 12 months ago. Call me a snob, but home brands still lack quality and with three children to feed, there is in my opinion less waste in sticking with what you know, rather than downgrading to products you may not have tried before.
The changing role of women and how they have adapted to the financial downturn is also highlighted in the report, with Grey managing director Jane Emery saying that it shows women are still the backbone of the Australian household. The report says most major household decisions are undertaken solely by women, with 59% in charge of household expenses and 74% take charge of supermarket shopping - compared to 34% of men. Come on fellas, clearly we should be pulling our weight more!!
Other key findings (and my comments):
- 41% Australians feel they live in prosperous times - down from 70% in 2008 (no surprise);
- Unemployment and job security (29%) is seen as the number one issue facing Australians over the next five years (no surprise);
- 28% people know someone who has lost their job as the result of the global financial crisis (no surprise);
- 86% Australians are actively trying to reduce debt (no surprise and don’t we do this anyway recession or not?);
- Only 16% of women feel job opportunities are consistent for both sexes, compared to 49% of men (that is a concern);
- 39% consumers are prepared to pay more for eco-friendly products or services , which is down from 49% last year (so, does this mean we don’t care about the environment, or has the recession led many of us to abandon the priority of being green to save money?).
- 51% rate as the number one concern drought and water issues, which is a major issue in Australia.
- Most respondents (76%) think most companies are still not environmentally conscious and 83% agree companies should tell people what they are doing about the environment.
- Only 31% of consumers are ‘extremely’ or ‘very’ concerned about the effect of the environment on them personally or their household, compared to 37% in 2008 and 49% in 2007.
Finally, on Internet used (and my comments):
- Browsing the internet is Australians’ number one source of ‘unwinding’ (64%); - Contrary to belief, even 68% of Baby Boomers rate surfing the internet as their primary tactic for unwinding (are we that boring?);
- 74% of respondents subscribe to e-newsletters (boring…!);
- Only 45% of Australians have watched an advertisement online in the past two months (that did surprise me);
- or in an email someone sent to them (49%) - gotta be too much spam;
- 90% of respondents search for information on products or services online before buying (no surprise)
Overall, no real surprises, but some interesting differences. What do think? Are Australian consumers just an optimistic bunch, or is the recession hurting more in other markets? Clearly, the sun and surf may help keep us happy, but I suspect if Gray was to conduct this research again, today, many would not be so positive, with the bottom of the recession forecast to hit in October.
Media Relations Myths