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Tough Times Call for Tough Marketers

December 8, 2008 on 11:27 am | In Brand, communication, Big Boy Marketing, Media, Marketing, Branding, Advertising |

OK, the media tells us the economy is in the dumper. There are some trouble spots, but it is not as bad as they are painting it. It is, however, a tougher environment than marketers have known for a while. While others succumb to the gloom and doom, the tough marketer can turn this into an opportunity.

What do I mean? Well, received this note from my friends over at ad agency, Collins Haynes and Lully. Apparently, they have been thinking along the same lines. Let me share some of their tips.

As reflected in a Kellogg School of Management study, increasing advertising spending during economic expansion often yields no improvement in market share, because 80% of your competitors are also increasing their spending.

Conversely, at least half of businesses reduce their adverting spend during an economic downturn, stated the Association of National Advertisers in a recent article. Scores of studies, such as that recently conducted by Penn State, reveal a hidden positive: an opportunity to achieve a relative competitive advantage for businesses simply by maintaining current levels.

Highlights of findings from Kellogg and Penn State studies:

- Businesses that maintained or increased their advertising spend during recession averaged higher sales growth during the following three years

- Within four years, the businesses that maintained or increased their advertising spend during that recession experienced a 256% growth in sales over those that had cut back on advertising

- A decade later, an additional study found that aggressive recession advertisers increased market share 2½ times the average for all businesses during the post-recession

Another perspective to consider is that advertising is a cumulative effort. Robert Wilson explains, “Maintaining brand recognition should be considered an on-going business investment” and “the moment it stops, it begins to lose power immediately – and future sales are in jeopardy.”

I don’t think advertising is for every business. But if you will substitute the word “communication” for advertising in the above I think you’ll be on the way to gaining market share over less aggressive competitors during turbulent times.

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Very interesting findings in these studies. I wonder how many people blindly cut communications budgets without considering the upside to simply maintaining their current spending levels. Regardless, with so many companies making changes to their communication strategies in light of the economic downturn, it will be interesting to see who the winners and losers are when the dust settles.

Keep up the great work!

Comment by Dane Moody — December 8, 2008 #
A great reminder that it pays to be counterintuitive, countercyclical and downright contrary at times.(Should I add bah humbug here?) If everyone else is doing something that usually adds up to an opportunity to stand out by doing the opposite.

Comment by julie power — December 9, 2008 #
Amen, Julie.

Comment by Harry Hoover — December 9, 2008 #
[…] Posted on December 11, 2008 by mzkagan Recently, my pal @MarketerBlog drew my attention to this post which suggested that brands that INCREASE their marketing/ad spending during a recession stand to […]

Pingback by Recession? What recession? « The Secret Diary of a Bonafide Marketing Genius — December 11, 2008 #
[…] a just a fun turn of phrase, but also a great piece of advice. “Businesses that increase their marketing during recessions gain a substantial competitive adv…. Fight the recession by telling more people that it’s ok to do business with you. […]

Pingback by Turn Into The Skid : adsymetrix.com — December 12, 2008 #
What Recession? This is a Great Depression, and it continues to build and compound. I see signs of cascade failure in American retail, so many depleted shelves, staples out of stock. I talked with Pacho Underhill yesterday. He’s out analyzing outlets on a weekly basis. Something big is happening. He points particularly to grocery merchandizing. Pacho is closing his account at Morgan Stanley (my shop) to pay off his retreat in Costa Rica. He says he may retire early there before the next wave hits. I see much of what we discussed here in urban New Jersey. Everything shows signs of disintegration around the margins.All the pep in the world won’t revive a dead Venezualan polo pony.

Comment by Grady Lee Howard — April 23, 2009 #
[…] my pal @MarketerBlog drew my attention to this post which suggested that brands that INCREASE their marketing/ad spending during a recession stand to […]

Pingback by Recession? What recession? — May 11, 2009 #

Tough Times Call for Tough Marketers

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