Marketing spending: the canary for the US economy

When Blackfriars published our March marketing report, we noted that the three-year low for the Q1 Blackfriars Marketing boded ill for the US economy. Our reasoning is that when companies dramatically slow down spending on marketing, their sales fall over the next one to six months, since they aren't spending to bring in new business. Well, today's Wall Street Journal (subscription required) has sad confirmation of that theory, noting that retail sales overall fell 0.2% in April.. That may not seem like much of a drop, but given the large role consumer spending plays in propping up the US economy nowadays, it's an important change in direction from the 1.0% growth in spending in March.

Our prediction: with fuel prices rising and consumer spending falling, a lot of businesses are going to feel stretched thin this summer, and many businesses cut marketing spending at the first sign of trouble. Marketers should polish up their their quick return-on-investment slides for summer pitches -- we think they are going to need them.

Technorati Tags: Blackfriars Marketing Index, Consumers, Marketing, Retail, Spending