Whatever You Do–Don’t Cut Your AD Budget!

by Sean Tracey

Sure, it sounds self-serving coming from one who trades in advertising services—but don’t take it solely on my word.  Check the facts1.  There are multiple research studies conducted and published by McGraw-Hill, Harvard Business Review, McKinsey, Coopers & Lybrand, American Business Media, and others (independent, non-agency firms, with no conflict of interest).  These studies prove, historically, that advertisers who stayed the course during economic downturns fared better in both sales and profits during a recession and for years after it was over.  So, pulling back on your advertising during tough times will cost you market share and sales for your company and its products.  Continuing to invest in advertising in a down economy has proven to reassure current customers (promote your company’s stability), win new customers for your brand – and even draw them away from competitors who have cut back on their advertising efforts.

To advertise effectively in a recession, however, you may have to tweak your message, or even to embark on an entirely new creative strategy.  Keep in mind what’s on the mind of the consumer today.  Don’t waste your breath (or your budget) bragging about your products as bigger, better, faster, or the envy of the neighbors.  Save those features and benefits for better economic environments.  Instead, spare no words or images to describe how your product or service can save your customers money.  For example, overdraft alerts on a bank account, or a high-deductible, tax free health savings account will help them forget their worries.  Or, relieve some of their pressures by advertising a no fee, fixed rate home equity loan, or a low-cost phone service.

The average recession lasts only 10 months.  By that calculation, if you admit that we’re in one now, we should start coming out of the hole by June ’09.  Take a lesson from the companies that did best in all the recessions since researchers tracked this stuff (1949).  Fund your advertising aggressively during and perhaps in spite of the economy of the next few months.  You could emerge the victor!  Remember that maintaining your brand’s identity will cost less than rebuilding it later.

When I was just a little tike, having the worst day imaginable, my Dad commented, “When the going gets tough, the tough get going.”  I wasn’t too happy about bucking up and walking it off, but as it turned out, it was pretty good advice.  The alternative isn’t as promising.

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1The Studies and Related Links:

Meldrum & Fewsmith:  (http://www.mactech.com:16080/adsales/recession_marketing/)

Roberts, Kieth. What Strategic Investments Should You Make During A Recession To

Gain Competitive Advantage In The Recovery, Journal of Strategy & Leadership, Vol. 31,

Issue 4.

International Journal of Research in Marketing, Vol. 22, Issue 2.

American Buisness Media, The Value of Advertising During an Economic Downturn

AllBusiness.com,  Excerpt from NW Ayer, Inc. report:  (http://www.allbusiness.com/marketing-advertising/advertising/260415-1.html)

Christianity Today International:  http://www.cti-advertising.com/newsletters/article.asp?id=121)

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