Should Businesses Advertise During Tough Economic Times?
When the economy is in a downturn, businesses examine all their costs carefully. Cutting advertising budgets is very tempting. However, research shows that cutting back on advertising during tough economic times can totally backfire!
Here’s what the research says:
- There is a strong co-relation between growth and advertising during a recession. A 2009 Hurwitz & Associates study showed that 2/3rds of small business that expected to grow were spending, or going to spend, more on advertising. Of the small businesses that did not expect to grow, the majority did not plan to increase their advertising budgets.
- An ABP/Meldrum & Fewsmith study showed that during the recession in the mid-1970’s, companies that maintained or increased their marketing budgets had higher net income and sales than companies who made cuts. This effect lasted several years after that recession ended.
- According to a MarketSense study, spending more on advertising certain brand-name foods resulted in significantly increased sales during the 1989-91 recession. Fast food franchises Pizza Hut and Taco Bell took market share from McDonald through increased advertising during that recession.
- The MarketSense study concluded, “The best strategy for coping with a recession is balanced exploitation of ad spending for long-term consumer motivation, plus promotion for short term sales boosts.”
Tips for advertising during a recession:
- Maintain or increase your advertising budget. Don’t cut it — big mistake!
- If you notice your competitors cutting back on advertising, rejoice! Your marketing automatically grows stronger because you get more share of the “voice.”
- Keep your loyal customers.
- Be consistent. Advertising has a cumulative effect.
- Target your message to the customers you want.
- Use sensible and diverse approaches in your marketing plan. Don’t put all your eggs in one medium.
Many business owners get caught up in the day to day aspects of their business. Remember, as the owner of a business, you should be marketing all the time. If you don’t have a marketing plan, get one put together right now. It will make a difference.
Continued Success and thanks for reading!
Dave Segatti, MAD Media, www.gomadmedia.com
