New YorkMeeting planners may feel they're going about their jobs against a background of uncertain economic times, tenuous budgets, and jittery bosses or clients. Yet, companies seem to be maintaining their composure when projecting future meetings budgets, even as they advocate financial discipline.
Those are the findings of two new surveys released last month. One, conducted by American Express and CFO Research Services of mid-sized firms in North America, reveals a general commitment not to slash meetings and event budgets over the next two years. Instead, companies generally intend to weather the economic maelstrom through savvy cost management and increased investment in employee productivity tools.
The other survey, by event marketing firm George P. Johnson, the MPI Foundation, and the Event Marketing Institute, and focusing largely on major enterprises, is also optimistic: While marketing budgets are shrinking a bit, event marketing has increased its share in the marketing pie to 27 percent in 2007, the highest percentage in the past six years, according to the poll.
Productivity Stressed
"Companies still feel pretty optimistic about their ability to grow," said Eduardo Vergara, senior vice president of American Express Global Commercial Card & Services. "To drive that growth, they intend to continue to spend in areas of productivity enhancement. And, they're seeing meetings as a productivity-enhancing investment."
The Amex/CFO survey of companies with annual revenues of $10 million to $1 billion found that training meetings are still considered vital and resistant to cost-cutting. Underscoring this, 37 percent of respondents indicated they will invest more in educational training of their employees over the next 24 months. In addition, 54 percent said their training budgets won't be cut, versus just 9 percent who said they plan to retrench in this area.
As for event marketing, the Johnson/MPI poll, called EventView 2008 North America, and including corporations of greater than $1 billion in sales (with some overlap into mid-sized territory), showed that this segment received the largest budget increase allocation of any marketing tool in 2007, with print advertising not far behind.
"One of the things we have seen consistently over the years with the EventView study is that, uniformly almost every year, C-level marketing managers see meetings and events as their most effective marketing tool," said Carol Krugman, director of client services for George P. Johnson, in Boston.
Krugman seconds the Amex/CFO poll, saying that training meeting budgets are holding up, while incentives are retaining their essential status for sales.
"The change has been from extravagant to less extravagant," said Bjorn Hanson, New York-based hospitality consultant for PricewaterhouseCoopers, of incentive meetings. "A difficult economy is not the time to affect that negatively."
Mid-Sized Budgets Increasing
The Amex/CFO survey of 402 senior finance executives, polled in November and December, expresses confidence in meetings and events, even as many experts predict a tough recession ahead. When asked about projected meeting and travel budgets over the next two years, 23 percent said they will increase their expenses, and 61 percent indicated their companies will keep them stable. Only 16 percent of respondents noted their companies plan to reduce meetings/event spending. Vergara noted that the sentiments of mid-tier organizations are a rather good bellwether of corporate confidence, as they are more sensitive to changes in the economy than much larger organizations.
As for the Johnson/MPI survey, it tracked the opinions of more than 302 senior sales and marketing executives in North America from October to December. Twenty-two percent said events have the greatest marketing ROI, compared with web marketing and direct mail. Face-to-face interaction was cited overwhelmingly by respondents as event marketing's appeal. The Johnson/MPI poll also revealed that marketers who measured the ROI of their events were one and a half times more likely to expect an increase in their event marketing budgets versus those who shrugged off measurement techniques.
Greater Discipline Needed
While the Amex/CFO study underscores a generally upbeat commitment by mid-sized companies, the survey also revealed a potential Achilles heel: Controlling employees who sidestep company recommendations for spending with preferred suppliers.
Nearly half of all respondents reported they have preferred-vendor status with airlines and hotels, and even more have similar arrangements when purchasing office supplies and shipping services. Yet most companies give employees free rein in deciding which suppliers to use, which can undermine the most carefully negotiated meetings, lodging, and materials spend. More than half of respondents see room for improvement in monitoring employee compliance with expense policies.
"By tightening policies, mid-sized firms can channel spending to favorite suppliers, build for future deals, and at the same time save money," Vergara said.
"Today's much more professional planners negotiate more aggressively and favorably on behalf of their attendees," said Hanson, "while promoting the favorable economic aspects of their meetings."
Originally published April 7, 2008