(Aug. 24, 2009) — All too often when the economy slows, companies slash their advertising and marketing budgets, figuring they'll wait until the economy rebounds to start things up again.
This mind-set defies logic and ignores data.
Think about commercial fishing crews and how they operate. They don't plop down on the dock and use fishing poles just because boat fuel, bait and nets cost too much: “Yep, I reckon if we sit here long enough, prices will come down. In the meantime, let's just sit here and wait for those fish to come find us.”
An overly simplistic analogy? Of course. But it clearly illustrates a fundamental truth in marketing: Companies that maintain or increase their advertising spending during recessions grow substantially more than those that don't — and there is data to support this premise.
A 1974-75 study done by McGraw-Hill Cos. Inc. discovered that firms that maintained or increased advertising during recessions experienced a 256 percent spike in sales compared with companies that cut their ad budgets.
A follow-up study, of the 1981-82 economic downturn, had similar results: Those advertising during the recession enjoyed a 275 percent increase in sales during the subsequent five-year period.
Harvard Business Review found that companies that increased their advertising during the 1974-75 period enjoyed increased sales and market share, while those that cut promotions lost both.
A MarketSense LLC study of the 1989-91 recession also showed substantial gains for brands that increased advertising.
A recent Ad-ology Research study showed nearly half of those surveyed perceived a decrease in advertising as an indication that a company was struggling.
There are even more studies saying essentially the same thing, but you don't need data-heavy reports to back up what is purely logical thought.
If fewer companies are advertising, your name and message stand out more, delivering a clearer message. With less competition and clutter in the marketplace, you can expect higher sales both during and after a recession.
Too many companies view advertising as an expense. So when the economy tanks, they reduce or even eliminate their ad budget without considering the repercussions or the opportunities they are passing up.
A unique opportunity for real growth is out there right now for smart, stable companies willing to invest in their advertising and marketing efforts. Remember, an investment is something acquired for future financial return or benefit. The current economic climate is ideal for forward-thinking businesses to build brand equity, shore up customer bases and grab customers from competitors that have slashed advertising.
Companies should be cognizant of the messages they send and the perceptions they create.
When you stop actively communicating with your target audience, you no longer control your message. Whatever information you want to convey disappears, creating a void that is filled by speculation and your competition.
From bad to good
The key to converting the current challenging environment to one of opportunity and growth is making the most of your advertising budget by being smarter in your marketing efforts.
* Spend wisely. Determine who you want to reach and what publications and Web sites are best at reaching them.
* Increase your visibility and exposure through a targeted public relations program.
* Take advantage of flexible ad rates and special promotions.
* Get your business included in free print and online directories and lists. The more your name appears online with certain keywords, the higher your ranking in internet searches. Placing links on your Web site to your company's listings on high-traffic sites will bolster your rankings.
* Promote your company online and through e-mail. It's direct, effective and inexpensive.
* Channel funds into sponsorships, which directly deliver clear messages to targeted audiences.
* Repeat. Repeat. Repeat. Nothing is accomplished by one-time advertising. Run ads consistently so you remain fresh in the minds of your target audience.
* Remind your customers how you can help them. Maintain frequent contact with them — at least once every 90 days.
* Focus on quality ads. Don't skimp on size or eliminate color, because the marketplace will notice, and that will weaken your brand.
Don't think you'll be able to ride this out until better times return — because if you stop marketing, the good times may never come back.
Kokish is president of Vocitare Marketing in Brunswick, Ohio.