As a part of the Tampa Business & Wealth family, we wanted to let you know that we are in this together and we want to help you protect your company. It’s hard to stay calm when a recession is looming, but brands that stay the course are always the ones to have it hit last and recover first. Continuing, or starting, to advertise and market during a recession will assure your company fairs better than those who don’t. We are all still buying, still shopping, still need things for our homes – our companies – and our employees.
“A man who stops advertising to save money is like a man who stops a clock to save time.” – Henry Ford
It’s been proven, again and again…
Keeping your brand in front of your customers keeps you first in their minds. John Quelch is the Senior Associate Dean and Lincoln Filene Professor of Business Administration at Harvard Business School. He writes a blog, Marketing Know How, for Harvard Business Online which is also reprinted on HBS Working Knowledge. According to Quelch, “Uncertain consumers need reassurance of known brands. Successful companies do not abandon their marketing strategies in a recession; they adapt them.”
2000’s – Research presented by the University of North Carolina marketing professor Jan-Benedict E.M. Steenkamp in a Bernstein conference call last month indicates that companies that maintained or hiked ad spending generally, and TV spending in particular, lost limited share to private labels in recessions between 1985 and 2005.
1990’s – A MarketSense study concluded the best strategy for coping with a recession is balanced long-term branding with promotion for short term sales. The study shows brands like Jif and Kraft Salad Dressing experienced sales growth of 57% and 70%, respectively, after increasing their advertising during the recession.
1980’s – McGraw-Hill Research analyzed 600 B2B companies and found that those who maintained or increased advertising grew significantly, both during the recession and, the following three years. In fact, by 1985 sales of companies that advertised aggressively had grown 275% over those that didn’t.
1970’s – An American Business Press study showed that companies who advertise and market aggressively can maintain and increase sales during a recession and in the following years.
1940’s, 50’s, 60’s – Buchen Advertising tracked advertising dollars vs. sales trends for the recessions of 1949, 1954, 1958 and 1961. They found that sales and profits dropped at companies that cut back on advertising and, that after the recession had ended, those same companies lagged behind the ones that maintained their ad budgets.
1920’s – Advertising executive Roland S. Vaile tracked 200 companies through the recession of 1923. He reported in the April 1927 issue of the Harvard Business Review that companies that had continued to advertise during the economic downturn were 20% ahead of where they had been before the recession, while companies that reduced advertising were still in the recession, 7% below their 1920 levels.
Source: Advertising Specialty Institute
Brands that safeguard the hard-earned equity previously won in their marketing and brand campaigns will preserve the foundation they need to grow and rebound faster than competitors. If companies cut into advertising and communications budgets during a down period, the cost to regain that share of voice in the market once the economy turns may cost as much as four or five times.
Keeping a level head and committing to a long-term marketing strategy can help you flourish in the down cycle and be fully prepared to capitalize on the upswing. Should your messaging change? Absolutely. Should you appear empathetic and consider a way to include a cause marketing message? Yes. Should you go dark, cut back or run scared? No.
A continued presence during tough economic times will be viewed as a sign of stability, showing your business is strong enough to survive through the difficult times and has the leadership to continue to thrive.
We can help, if you let us … 😊
Stay strong and safe out there, you’re all in our thoughts and prayers.