Smart Marketers Advertise During A Recession. You Should Too
You know that tired old mantra as to why it's smart to advertise during a recession? Ever wonder why it's regurgitated ad naseum every time the economy tanks? Because it's true! Yes, advertising during a recession is the right thing to and there's research top back that up.
A McGraw-Hill study of 600 businesses found businesses that maintained or increased their ad spend saw higher sales growth during a recession and in the years following. In fact, the study found those who maintained or increased their ad budgets experienced a 256 percent increase in sales compared to those who cut their budgets.
Another study found businesses that advertised during a recession saw their market share increase 2.5 times.
And if you think waiting until the recession is over is a smart thing to do, consider this; a third study revealed 80 percent of the businesses that waited until a post-recession economic expansion to advertise saw zero increase in market share. Which, of course, is obvious since everyone else began advertising again.
Sadly, not many companies take these facts to heart. Rather, they recoil, close the wallet and pray. Other realities come into play such as the indisputable realization that if there's no budget, there's no budget. And all the desire in the world to advertise during a recession isn't going to change that sad fact.
But...if you can beg borrow and steal, study after study proves, time and again, it's the smart thing to do.
Now for the sales pitch. We're Adrants. We love advertising. Our readers love advertising. They work in the adverting business. They're very cool people. They buy stuff. Stuff for work and stuff for play.
In addition to hard demographics such as 64 percent having more than five years in the business, 73 percent actively involved in buying/selling/creating online media, 70 percent holding senior management or higher jobs, 67 percent having full control of marketing budgets; they tend to be stylish and fashion conscious, into pop culture and music, attune to trends, consumer technology savvy and a whole host of other desirable qualities many advertisers love. Check out all the reader stats here.
Times are tough. For you. For us. For everybody. But do the smart thing. As the research proves, invest now, realize the benefits later and watch your competition disappear in your rear view mirror as you blast out of this recession miles ahead of the competition. Adrants Sales guy Justin Martin awaits your call. He has ideas. He will make things work for you.
UPDATE: Here's a fantastic aggregation study done by Michele Hush, several of her associates and mNovak Design that goes deep into what happens with marketing in a recession and what companies can do to work their way through it. And it's all in easy-to-read presentation style.
Comments
Amen Steve.
good numbers. cheers
Good post, but there's an inherent problem with any argument that makes a causal link between advertising through a recession and emerging stronger afterwards.
Investing in advertising may well be beneficial, but the companies spending on advertising through recessions are the ones that are in a strong position already. These are the companies which aren't having to slash their ad budgets (or their other investments) and arguably would be the ones primed to grow most strongly anyway.
Smart marketers use smart advertising during a recession. Clearly the boom market advertising methodologies don't necessarily apply in leaner times. Smart marketers need to reduce advertising waste, measure twice and cut precisely in the areas which will provide the most ROI. More and more marketers are moving to a pay-for-performance model for their advertising. Cost Per Action, Cost Per Engagement and other specifically measurable performance-based marketing models are the key to efficient and effective marketing in this economy. Don't stop advertising, just be smarter about how, when,and where you're advertising.
"study after study proves, time and again, it's the smart thing to do"
Hate to rain on the parade, but this one is sort of like that "all cell phone numbers will be turned over to telemarketers March 30th!!!!" myth.
The McGraw-Hill "study" has never answered two challenges - why were only these 600 companies studied? and only B2B? and what cause/effect attribution was stripped out?
Then there was "another" study (no source) that said "aggressive" (definition?) spenders increased sales.
Then finally, a third recession-spending study that was done DURING AN EXPANSION.
That's all there is.
Again, not to take away from your main message at the end of this post to get companies to advertise, but people should be looking forward not backward (at thin, suspect data).
If i had any money, I'd sure as sh*t buy an ad on Adrants!
Yes. I agree and wrote a white paper on this, published an a Healthcare Marketing site, (see: http://seantracey.wordpress.com/2008/08/28/whatever-you-do-dont-cut-your-ad-budget/) and have been speaking around the country on the topic of Smart Advertising in a Down Economy. I cite this and other studies, and have my own case studies.
Yes. I agree and wrote a white paper on this, published an a Healthcare Marketing site, (see: http://seantracey.wordpress.com/2008/08/28/whatever-you-do-dont-cut-your-ad-budget/) and have been speaking around the country on the topic of Smart Advertising in a Down Economy. I cite this and other studies, and have my own case studies.
My first job in advertising sales was in the B-to-B market for Cahners. Whenever the ad market turned soft, the sales team would trot out that McGraw-Hill study among other research reports to share with clients on the value of advertising during a recession.
I always found it remarkable that these same business publishers were the first to cut back on advertising and marketing when business was soft.
I concede that no study is perfect and neither is this one. But, forgetting studies, logic dictates an advertiser who advertises when many others are not 9during a recession) would have a higher share of voice and potentially a greater chance at having people respond to their advertising.
"logic dictates an advertiser who advertises when many others are not 9during a recession) would have a higher share of voice and potentially a greater chance at having people respond to their advertising"
No argument there at all. Well said.
If you've got the budget or the foresight, I can't see how advertising smartly in a recession when everyone else is hunkering down could not be a smart plan, regardless of studies.