Marketing on a shoestring.

• Author: Bernstel, Janet Bigham
• Position: Cover Story

With the uncertain economy, budgets are being frozen or cut back.

We offer some advice on stretching the effectiveness of your marketing dollar during a time of fiscal austerity.

Cutting expenses is a natural reaction when the overall economy is sluggish. Unfortunately, marketing and advertising budgets are easy targets. It's no surprise to find that media spending by financial services institutions dropped by 22.6 percent in 2001, according to Advertising Age magazine's 2002 report on the 100 Leading National Advertisers. Even if budgets aren't actually cut, they often get reallocated to other areas during the year.

"Marketing budgets are definitely getting tighter, and while flexibility is built into the plan, it can be frustrating when you suddenly have to pull all your resources from one place and put them into another," explains Alisha J.R. Johnson, senior vice president and director of marketing for Highland Bank, an institution with $80 million in assets in St. Paul, Minn. "But that's the nature of the business--they want you to do more with less, so despite the fact that the money is there, it doesn't give you the right to spend it."

Jeff Bargerhuff of Nevada State Bank, Las Vegas, agrees. Competition in the growing Nevada market is intense, he says, with both large and small banks advertising more. But his marketing budget remains static.

"Basically we're doing more with about the same," says Bargerhuff, senior vice president and marketing director of the bank, which is the third largest commercial bank in the state. "I think the majority of folks will find their budgets are either going to be flat or go down a little bit. People are pulling back."

Seasoned marketers understand that it's crucial to maintain their marketing investments during downturns. So the pros meet these economic challenges with gutsy, money-saving, revenue-generating ideas like the ones discussed below.

Negotiate everything

Rule number one when maximizing the marketing budget: Everything's negotiable. Haggling with the media and advertising agencies is not for the squeamish, though. It takes a lot of creativity and sometimes, sheer bully tactics.

"Because we've been beating up the (media), we're getting more coverage in print and especially broadcast," explains Bargerhuff. 'We got together at the beginning of the year with our ad agencies, told them to talk to the media and get it on a cost-per-point basis (for broadcast media) and get an annual contract."

They all "pitched a fit," he says, but it worked. He also tracks ratings numbers when they've been guaranteed. If the ratings are lower than promised, the TV or radio station will make good with additional airtime.

Do it yourself

Johnson is able to save money for Highland Bank by doing much of the advertising work herself, from laying out ads to editing and copywriting. In fact, she hasn't paid for ad agency help in years.

She uses freelancers for producing brochures and ads. "When you work with freelance people, there's more work on your part, but it costs considerably less than using an ad agency."

Besides bidding out the printing herself, she does her own media buys and demands the media agency discount.

"I get it because I give them the ads in the specified electronic format, and there's no work for them, which is why they give discounts to agencies," explains Johnson.

And don't be too quick to change the ad, especially if it's working. For example, Highland Bank had great success with a home equity line of credit (HELOC) campaign that places the emphasis on monthly payments versus rate, and the bank continues to run it.

"We've had a phenomenal response on that ad," says Johnson. "The creative was done in 2001, and I've used it in 2001 and 2002, and we'll use it one more time in 2003. That's really been a cost saving for us."

Sales and marketing consultant Thomas Hershberger of Cross Financial Group in Lincoln, Neb., also likes that HELOC information piece from Highland Bank for several reasons:

* It stands out as part of the sales process. "They used their marketing communications to support the most effective way to sell the product," he explains. "If you're not going...