What Takes the Chunk of IMC Budgets for 2010?

Brand custodians and agencies acknowledge the importance of an articulate integrated marketing communication (IMC) plan for brands that want to raise their flags higher. In this piece, Olaseeni Durojaiye, Joseph Ekeng, Yetunde Ogundipe and Onyinye Obiweluozor look at where corporate organisations will likely spend their marketing communications budget for 2010.

How companies market during a recession remains an interesting topic among scholars and practitioners in the marketing communications industry. As a new year takes off, the issue returns to the front burner in the industry.
The expectation is that any business organization positioning itself for a good measure of market share would naturally have a business strategy in place, making the issue consistently relevant.
M2 investigations across sectors on what trend marketing spend for year 2010 will take shows that brands would be treading cautiously. Both agencies and clients are setting off carefully this year as many brand custodians and agencies contacted by the magazine seemed reluctant to disclose any particular spending strategy for their marketing budget.
Their opinions differ on what marketing communication channel would get the lion’s share of the marketing budget-spend in 2010. While some insist their companies will use advertising, others vote PR, while a third group opts for activations.
A random sampling of leading businesses in the telecoms, banking, Fast Moving Consumer Goods (FMCG) and Oil & Gas sectors show that 2010 marketing plans are guarded jealously and by extension, a reluctance to disclose what communication channel the companies favour for the unfolding year.

Agencies Think Experiential, Advertising
The strategy of leading brands to take advantage of the recession to position their products for post recession relevance is likely continuing in 2010, strongly influencing the flow of the marketing budget.
Brand builders who spoke to M2 are of the view that brands will engage more directly with their consumers by marketing experientially this year. This is because experiential marketing offers brands sufficient opportunity to connect with the target audience and allows consumers to touch, smell, taste and feel the brands. It offers a platform to create loyalty and bonding.
Olusegun Aluko, Managing Director of Below the Line Solutions (BTL), believes the recession of last year made Nigerian clients less adventurous unlike their foreign counterparts. He cautions that even though many local companies are currently cutting budgets, brands cannot afford to tamper with the budgets for experiential marketing. “The way corporate organizations and brands are likely to go in 2010 is more towards direct marketing. They are more interested in result oriented strategies. This is as a result of the realization of the importance of brand activation as a way of sustaining and connecting brands with the target audience.”
Sam Osunsoko, Senior Account Director of Insight Communications, is of the opinion that not all clients are cutting down on their budgets. “The knowledgeable brands are not cutting theirs because they know that this is the best time to lock the essence of their brand in the minds of consumers,” he says.
He also differs with Aluko on where the bulk of IMC budgets would be going, preferring advertising instead of direct marketing. He hinges his reasoning on the fact that the “Central Bank of Nigeria (CBN) has predicted that Nigeria’s GDP will grow between 7% and 8% in 2010.” He expects brands to respond to this positive development in their marketing budgets by tilting more towards advertising.

GTBank Embraces New Media
The mood in Guaranty Trust Bank (GTBank) remains essentially unchanged as the bank has no overriding need to alter its strategy having emerged free from blemish in the ongoing Sanusi-led CBN banking reforms. But despite its post reforms gains, the bank’s budget for this year has been slashed in many areas including marketing. Femi Adeniran, Head Corporate Affairs, told M2 that the era of extravagant marketing spends is gone because unlike in the pre-reforms era, there is not as much money in the system.
For this reason, Adeniran says that GTBank has resolved to do more online campaigns which he claims are cheaper and more impactful. “Nobody can afford conventional means of advertising because it is too expensive and there is not as much money in the system,” he says. “Therefore, GTBank will be doing more of online advertising in its marketing communications this 2010 having found it “cheaper and more impactful”.
The bank’s posture is in line with the sharp growth of the internet culture in Nigeria. According to research, more Nigerians are embracing the internet. Facebook, one of the largest social network media, noted in a recent report that Nigeria ranks number 10 on its subscriber table. Nigeria also has a huge representation on yahoo, twitter and other online media, bringing with these enormous marketing opportunities that responsive brands like GTBank are exploring to unleash their marketing communications messages to the people.
Advancing other reasons for his bank’s preference for new media, Adeniran says, “before now, there was too much money in circulation and so many people were not prudent.” The bank, we also gather, is not likely to be engaging in new advert campaigns.

Equitorial Trust Bank
A reliable source at Equitorial Trust Bank (ETB) told our correspondent: “I cannot tell you what marketing communication channel will get the bulk of our marketing spend. Doing so would amount to revealing our marketing strategy which no serious minded business owner would do. What I can tell you is that we have a business strategy that includes a marketing plan which we are confident would boost sales and profits in the long run.”
ETB will adopt a flexible marketing plan for 2010. A source within the bank told M2 that market demands will determine the focus of the bank’s marketing plan for the year.
A top marketing staff of the bank also disclosed that ETB, having received fresh capital from investor-in-chief, Mike Adenuga Jnr. after the CBN sanction, will adopt a combination of both above and below the line marketing communications.
The source hints that advertising may feature prominently in the bank’s marketing plans for 2010 and that ETB will continue running some of last year’s advertising campaigns, while not ruling out the possibility of launching new ones.
It will be recalled that until last year, ETB was one of the big banks that did not embark on any lavish campaign unlike UBA, Zenith or First Bank. Is this set to change? Market forces will decide for ETB.

Shell Gas & Power
Afolabi Akinrogunde, External Relations Adviser of Shell Gas & Power, would put no figure on what any particular channel of marketing communication gets. He volunteers that since the company deals with businesses, the bulk of its marketing spend will not likely go to advertising. Shell, the magazine reliably gathers, will spend more on reputation capital and community assistance projects in accordance with its business culture.
Akinrogunde expatiates: “We are a business to business organization so we have very little or no need of advertising. We are not like the MTNs, Etisalats and Zains that deal with consumers and have to constantly advertise. Of course, we’ll do a few advertising, maybe, on October First and on other few occasions.
“Though I cannot reveal how much we will be spending but we would be committing resources into various forms of community assistance projects. We will be sponsoring the annual Shell Cup, a couple of Golf Championships and the Arts Exhibition. This is basically what we will be doing as against advertising.”

Unilever Nigeria
Inside sources in Unilever Nigeria would rather not be specific but feelers from the company reveal that media will get a chunk of the company’s marketing communications spend. The company’s marketing plans had not been officially approved as at press time making it impossible for an authoritative assessment of allocations for specific channels.
A reliable source told M2: “You cannot be talking of where the chunk of marketing budget will go to when the budget itself has not been approved. As I talk to you, the marketing activities have only been drawn up but not approved. That has to take place before the figures can come into play.
“However, I do know that the media will get an appreciable sum of the overall spend. The actual amount is not known yet”.

Nigerian Distilleries Ltd
Fatai Odesile, Marketing Manager of Nigerian Distilleries Limited (NDL), is of the opinion that many FMCG companies may shun advertising and empty their marketing communications budgets on unconventional marketing channels.
While declining to pinpoint where the marketing budget would be primarily spent, he maintains that different brands would do things differently. His words: “I can’t clearly tell you where the bulk of marketing spend would go for some reasons. One, we have a portfolio of products and each brand has different challenges. The peculiar challenges that an individual brand is faced with will determine what marketing communications channel gets the bulk of the marketing spend of that particular product brand.”
Continuing, he reasons that “given the escalating cost of media buying, a lot of FMCGs may prefer to go the route of unconventional marketing. We are likely to see brands committing more money to ambience marketing, event management and the likes.”

Outdoor Agencies’ Slant
Ayodeji Abass, Managing Director of PrimeReach Ltd, an outdoor advertising agency, says it is hard to determine which marketing communication channel will receive the largest market share of clients’ budgets.
“Advertisers went further to cut down their spending on outdoor advertising, including other forms of advertising. Some clients have not renewed their accounts and it is telling on the business generally. Not just for Prime Reach Ltd, also for other practitioners.”
Ayodeji recalls that “a major player in the beverage industry whose account was being handled by another practitioner cut down their outdoor advertising spend in 2009 and this year did not renew their account at all. Even promos by different brands have been greatly narrowed or stopped. This goes to show that advertisers have really reduced their marketing communication spend and it is hard to prove where the bulk of this money is being channelled to, seeing that outdoor advertising is a major form of marketing communication.”
But, in the opinion of Babatunde Adedoyin, Managing Director/CEO of MediaViews Ltd, also an outdoor agency, the receding meltdown is sure to increase the marketing spending of advertisers. He says, “For now it will be hard to say point blank where the marketing budget is headed, but what is noticeable in the industry now is that generally the economy is bad. Many advertisers incurred losses in the previous year and have either reduced their advertising budget or halted it. The only products which seem to have the largest market share are beverages, telecoms and food but it is hard to say where the marketing budget is heading.”
Adedoyin counsels that “whichever way the pendulum swings, it is imperative that the marketing mix must be accorded due consideration in order that the money spent would achieve the desired results”.
He believes brand custodians and agencies should focus on questions such as: What are potential customers searching for? How is the competition reaching customers? What is the competition doing better? These will help in determining the most appropriate channels to allocate the 2010 marketing communications spend.
As brand experts determine where to channel their 2010 IMC spend, they will do well to remember that marketing is a non-negotiable strategy for business sustenance. Accordingly, shrewd brands should consider it an investment, not just a frivolous expense. Aggressive marketing advocates a strategic approach to investments, even if more expensive, in 2010.