Dec 09, 2011

Advertising in a Down Economy May Be Smarter Than you Think.

Ben Edmonson G/L Approach, Planning
Ben Edmonson Senior Art Director

At some point during a recession, every business’s advertising budget or marketing plan has had a setback—budgets cut, projects cancelled, creative direction changed, whatever. Sadly, usually the first thing to get cut during economic hardship is the advertising budget. The good news? There is a ton of factual info and insight to back up the fact that advertising in a rough economy can pay off huge in the long-run—or even the short-run depending on how you spend your marketing dollars.

Advertising doesn’t cost — it pays.
Over the years, there’s been a lot of advice offered on advertising spending during recessions. After all, the U.S. has weathered 33 of them. You can most likely take any recession and apply the same advice to our current economic woes. This snippet of advice from The Clark Company in late 2001, is no different:

In the 1920’s advertising executive Roland S. Vaile tracked 200 companies through the recession of 1923. He reported in the April 1927 issue of the Harvard Business Review that the biggest sales increases throughout the period were rung up by companies that advertised the most. After World War II, Buchen Advertising, Inc. decided to plot the sales of a large number of advertisers through successive recessions. In 1947, it began measuring the annual advertising expenditures of each company. When they correlated the figures with sales and profit trends before, during and after the recessions of 1949, 1954, 1958 and 1961, they found that almost without exception sales and profits dropped off at companies that cut back on advertising. Their studies also revealed that after the recessions ended, those companies continued to lag behind the ones that had maintained their advertising budgets.

You’ve got 12 seconds… maybe more if you’re lucky.
They say in advertising that you’ve got 12 seconds to capture your audience’s attention. Yes, it’s a cluttered world out there with a barrage of messages, taglines and “do this & do that” statements coming at you from every angle. Depending on how diverse your marketing plan is, it may buy you more time with your audience. Think about this—if you never advertise in the first place and take the proper steps for a shot at the first 12 seconds, your audience has already embraced the competition and isn’t going to wait for you to get on the advertising bus. Your budget doesn’t have to break the bank, but in this business, being smart and strategic could buy you all the time in the world.

It’s not always about outspending.
Granted, having a hefty marketing budget never hurts, but a smart, strategic marketing plan can take you a lot farther than just buying bulk time with your audience. Working within the budget that you have and hitting the right audience at the right time with the right message, could vault your product higher than you think. With new media outlets, strategy is more important than ever to guarantee the budget dollars that you do have are helping your ROI. Of course, this point always begs the question, “Can’t I just advertise myself?”

There is a difference between “cost effective” and “cheap”.
I can’t blame anyone for trying to save money, but when it comes to your brand, people will notice. Cutting back on costs, the amount of advertising and doing things cheaper might leave consumers questioning your quality and enthusiasm. Consumers might not flinch at first, but in time will look elsewhere for the same product or service—or worse yet, spread the word. Now is the time to take a different approach to spending your budget.

Either get creative or get more creative.
Being creative goes without saying to ensuring your company’s longevity. But, the ones that venture into new markets and take advantage of cost-effective advertising while not skimping on quality will make their dollars go farther. In addition to new media outlets such as social networking sites, posting comments on online forums, sponsorships, direct mail, blogging and public relations are all great ways to stretch your budget. Not to mention, the cost of advertising is down, so getting some great deals (or even negotiating) is cause in itself to maintain your advertising efforts—or possibly increase them for that matter.

Just because the phone isn’t ringing, doesn’t mean your business isn’t growing.
It has been my experience that most businesses want advertising with measurable results—and for good reason. However, when stretching your budget, it’s good to remember that any way to get your message out and create awareness for your brand is a good thing. Less and less of advertising these days is measurable in terms of where sales are coming from, but that’s not to say it isn’t effective. The more exposure you give to your brand, especially when advertising is down across the board, I believe says more about your business than when the advertising world is thriving. In the same way that consumers are ready to jump ship when their favorite brands take an advertising hiatus, they’ll respect your loyalty and stay on board when they see you haven’t wavered from your marketing path.

Turn your brand presence up to 11.
In addition to exploring new routes to achieving brand loyalty, increasing your advertising and marketing dollars is just another way of weathering our current market. While some companies are cutting back, the ones that have increased spending are taking their brand farther.

Jif logo                     kraft logo

A MarketSense study during the 1989-91 recessionary period shows brands such as Jif Peanut Butter and Kraft Salad Dressing increased their advertising and experienced sales growth of 57% and 70% respectively. During that time, most of the beer industry cut budgets, but Coors Light and Bud Light increased theirs and saw sales jump 15% and 16% respectively.

By increasing your share of voice, you increase your chances of eliminating the competition. Less competition means less clutter, less noise and more time for your brand to be heard. Let everyone else go backwards—crank things up and rock on!

Learn from others’ mistakes, you won’t live long enough to make them all yourself.
In my time spent gathering info on this topic, I came across a great quote that pretty much sums things up… “He who stops advertising to try to save money, could just as easily stop his clock to try to save time.” So, whether this market lasts another 5 months or 5 years, it’s safe to say that we can learn from advertisers past. Rough advertising times need to be seen as “opportunities” and not as a blow to your business. How else can you explain a lot of businesses starting up during recessive times? Since 1851, the U.S. economy has been in periods of contraction roughly one-third of the time, yet sixteen of the blue-chip companies that comprise the Dow 30 were founded during recessions and almost 60% of Fortune 500 companies began business in a bear market, according to a June 2009 report from the Ewing Marion Kauffman Foundation.

So, not only is it possible to survive times like this, it is possible to thrive—well into the future… and I think we all know why, my advertising friends. Our economic woes are either sure to continue or pop up again somewhere in our history and when they do, we’ll be ready.