Cut On Marketing - And Loose It All…
As the media hits us with daily reports of recession, and as monthly consumer statistics evidence the cut back in spending on luxury goods, one may wonder if festivals, in 2009, are next in line to be hit by the world wide financial crisis. Will audiences stay away to save money, or do festivals, on the contrary, represent much needed escapes from daily problems and depressing news stories?Indications are that audiences, in general, may not be staying away from cultural activities.That’s the good news. Yet festivals survive, also financially, on much more than audience numbers and ticket sales. Festivals’ income typically derives from a variety of sources, including sponsorships and in-kind support, and as sponsors may be facing dwindling income from their core business, they may be inclined to make cuts in their sponsorship budget line. For sure, they will be likely to be critical about their marketing spending.
So, what is your strategy? Will you accept the “chain reaction” of being understanding of your sponsors’ situation, accept less income to your festival, and make cuts to your own budgets, including your marketing budget?
Well, if you do, you’ll be likely to loose out - and so will your sponsors. While cutting marketing costs is a rather typical response to crisis, previous periods of financial recession - 1929, the late 1940’s, early 1970’s, and 1988-93 - clearly shows that the companies who maintain their marketing costs through the crises will come out with a greater market share once the crisis is over, while those who cut their marketing costs have to spend 4 times as much after the crisis as they have saved during the crisis in order to regain their previous market share.
- Which, obviously, is not just an argument for festival organisers to keep their own marketing budget (while possibly making careful cuts in programming or services instead), but also, not least, an argument festivals should be using when negotiating contributions with their sponsors.
Allan Xenius Grige, Chairman, IFEA Europe
Agree? Disagree? Want to share your thoughts on festivals in times of recession? Please leave your comments here.
