"I've been through several advertising recessions and the reactions are almost always the same," Drew Neisser, CEO of marketing consultant Renegade, tells Marketing Daily. "And the results are universally damaging to the brands that cut the deepest."
To help marketers navigate the recession, Neisser has outlined nine points to help weather an economic downturn. Some--like maintaining one's entire marketing budget--are probably impossible to accomplish, Neisser admits. But others, such as seriously reevaluating one's marketing mix, are almost no-brainers.
"The savvy marketer says, 'If I only cut a little bit, I can actually make some hay while the going is tough,'" Neisser says. Given the obvious proof of return on investment in such areas as Internet and promotional advertising, it's likely those budgets will be the last ones cut. However, trade shows and more traditional advertising--which Neisser both shamed for not having more reliable ROI models-- might be wise places to cut one's budget, he says.
Marketers also would do well to retrench and focus on their core consumers, Neisser says. "New customers are the most expensive to acquire," he says. "If you have fewer to work with, you should focus on the existing customers first." And focus on them closely. Find out how their budgets are affected by a downturn. Listen to them, and market products accordingly. "The one thing we can do is engage them," Neisser says. "Maybe the way you can increase sales is to understand how your products or services are being used as your customers' budgets are being cut back."
Marketers of personal services may also want to take note of their customers' changing needs, particularly if people have to take a second job to make ends meet. While the idea of asking a person to spend more money on a personal service, such as dog-walking, at a time when they need more income to pay bills, it may be that paying a little more for the service is what enables a customer to take a second job, Neisser says.
Marketers may also want to look at opportunities to align--or further align--with non-profits for marketing. While corporations have been turning to social marketeering and non-profit alignment recently, Neisser expects that to come to a "cataclysmic" end as budgets are tightened. Such programs, which are rarely tracked for their ROI, are likely to be among the first to experience cutbacks, he says. Those who stay with them--or find others--may be in line for some opportunity.
"No one tries to show ROI because this is goodwill. That's what's going to make it vulnerable. Rather than kill that, look at it as potential for tremendous ROI and monitor it," Neisser says. "You may be able to get more than you thought out of it because of the gratefulness of the non-profits who are truly going to be hurting."
Finally, marketers may not want to be so quick to revamp their ad message, particularly if a brand has been reliant on humor in the past. Acknowledging bad times might feel right, particularly if a recession is protracted, but consumers may not want to be reminded of that fact. And a little entertainment can go a long way, Neisser says. "If humor was right for your brand in good times, it's even more right for your brand in bad," he says.
Some of Neisser's suggestions are in line with findings from a 2005 Penn State study on marketing during a recession that found that "strong companies"--i.e., the ones set up to find opportunities in boom times--might take advantage of a downturn to gain more market share.
"If you read the paper, we used a sporting analogy. The best athletes punished the weaker opponents in the hardest part of the race," says Arvind Rangaswamy, professor of marketing at Penn State's Smeal College of Business, and one of the authors of the study. "Suppose your company is good at developing advertising, and you have some slack resources. Now is the time to exploit that. Every dollar you spend now will be more advantageous because your competitors will not be able to take advantage."
However, those that are not particularly set up to take advantage of marketing opportunities in strong times are not likely to see much gain during a downturn, Rangaswamy says. "If you are not a very strong brand, it's very hard for you to advance in a recession," he says.