We've been living it for months, and whether you call it an economic slowdown, a downturn or a correction, we know what you mean. All are polite ways of saying the
dreaded R-word. And, yes, we are in one now. For all the many challenging things that can happen in this time, it's quite possible that R-time could be the right time - the right aperture - for
brands to achieve marketplace success.
A recession creates many challenges for marketers defending advertising budgets to management looking to cut expenses as one way to weather difficult
times. But it also can represent a tremendous opportunity to solidify connections with a brand's consumer target and develop new customers. Advertising during a recession, using the right media,
timing and message, can, in fact, be the best consumer marketing aperture moment of all. When other marketers, especially competitors, are vacating the communications space, this is the moment of
opportunity to offer the consumer a branded marketing choice.
Some warn that if a brand spends more when times are tough, it will fail faster than a brand that tightens its belt. But when
it comes to advertising, history proves them wrong.
Studies of recent recessions tell the tale. MarketSense, a B2B marketing solutions provider, compared more than 100 household brand
names during the 1989-1991 recessionary period and consistently found that those who raised advertising budgets experienced subsequent increases in sales, ranging from 15 percent to 60 percent,
beating category competitors. A 2001 Yankelovich/Harris study of the B2B market found that 95 percent of customers more favorably view companies that continue to advertise, and maintain high interest
in learning about new products.
Sometimes, there's an opportunity to reach beyond your current consumers toward new customers. In 1974, one of the world's largest manufacturers of
hand tools, Stanley Works, sensed softening demand for its consumer products. In the heart of the recession, it boldly launched the biggest advertising campaign in its history, with network television
and magazine ads communicating the Stanley name to the consumer market. While sales of Stanley's heavy industrial tools fell sharply, its consumer business held strong, giving the company a large
increase in sales and profit in 1974 and preventing a substantial decline in 1975. Its hand-tool business continued to grow for years at an annual rate of 8 percent, twice that of its competitors.
In the 2001 downturn, IBM increased its advertising budget by 17 percent, realizing a sales increase of 8.9 percent. That same year, Home Depot saw similar results when it mounted a heavy
product push using television: The company enjoyed a 16 percent sales surge during that challenging economic period.
So as we tumble into recession, here's how we expect smart
marketers to keep an eye on the competitors: If the competition is reducing ad budgets, this could be a great opportunity for your brand to take advantage and flank.
Smart marketers are
evaluating the consumer's price sensitivity to their offering and to complementary products. With that information in hand, they are looking at shifts in media and creative that might emphasize
the greater value their brand provides.
Smart marketers understand that while people's basic behaviors stay the same, the expression of that behavior shifts. If, for example, people
historically eat out three times a week, during a recession they'll likely continue eating out, but at restaurants with lower price points. So while your core target market may purchase less, this
may be the right aperture to connect with other, perhaps more upscale, consumers looking for greater value.
When a company advertises in a down economy, it keeps them top-of-mind and makes
people feel positive about the commitment those companies have to their products and services.
For all of its attendant pain, an economic slowdown can create real opportunities to
communicate with your consumer and with new customers, and to connect them in meaningful ways with your brand. Here's another R-word for today's tough times: Resist those instincts to trim
advertising expenditures. As history shows, your brand should benefit in both the short and long run.