In influcencermarketinghub.com’s “Covid-19 Marketing Ad Spend Report,” we read what we thought was some rather disturbing news. The Cliff Notes version? Many companies are cutting their ad spending to due to the economic downturn.
There was a silver lining to the cloud, however: “While some companies are hunkering down, merely trying to survive at the moment by reducing their spending wherever possible, the survey showed that one in four companies are set to increase their marketing activities, and 41% intend to make use of the momentum to maintain or increase their presence in the media.”
Now, that’s some good news. And, we think you need to be one of the 41%. But don’t just take our word for it. Consumers agree. Of 35,000 consumers surveyed, 92% thought that brands should continue to advertise during the COVID-19 crisis; with this caveat. “Consumers believe, however, that it shouldn't be business as usual for marketers and advertisers. 78% think that brands should help them in their daily lives. 75% say that brands should inform people of what they’re doing, and 74% think companies should not exploit the situation.” So, yes, businesses should continue to advertise, but they must be careful about their messaging at the moment. Marketingcharts made this observation on the subject of downturn messaging. “As marketing messages developed earlier can have a markedly different perception during a time of crisis, the majority of marketing executives say they are somewhat concerned (52%) or very concerned (27%) about making missteps that may harm their brand image.”
After many, many years in this business, we know at least two things to be true. Number one: Come hard times, the first thing most companies do is cut their ad spending. Number two: The companies that don’t do that are the ones that will build market share and emerge stronger than they went in. Granted, this may seem counterintuitive, but we believe that there is much truth to this old ad agency adage: “When times are good you should advertise. When times are bad, you must.”
In fact, according to Forbes’ “When a recession comes, don’t stop advertising,” there have been numerous studies dating back to the early 20th Century that point out the advantages of maintaining or even increasing ad budgets during a weaker economy. “Over the years, those advertisers that maintained or grew their ad spending increased sales and market share during the recession and afterwards.” Kellogg’s in the 1920’s. Toyota in the 1970’s. Pizza Hut in the 1990’s. These are just a few examples of brands that grew market share, by double digits, during a downturn.
There are at least four reasons that we can think of, maybe more, to continue to spend on advertising during a downturn:
- You Own It
As your competitors back off because they feel that “it’s just not worth shooting at ducks that aren’t there,” you’re keeping your brand message out there. With 59% of businesses going dark, there’s less media clutter to cut through, giving you more bang for your advertising buck.
- You Can Be the Hero
Consumers are worried during a downturn. They’re looking for reassurances, even from the products and services they use. This is an opportunity for you to be a hero brand, one that’s not just some fair-weather friend, but a reassuring voice, a sign of stability, and a brand that is loyal to its customer base. In return, they’ll be loyal to you.
- The Cost of Media Plummets
A downturn is, for smart investors, a buyer’s market. The cost of media – both print and broadcast – can drop precipitously during recessions. According to a WARC article, “Advertiser exodus to bring sharp media deflation in 2020,” “traditional media is expected to see costs deflate due to COVID-19, with magazine (-17%), newspaper
(-11.8%), radio (-9.0%) and TV (-5.9%) media costs all predicted to decrease.”
- Increased Share of Mind and Market
With an increased share of voice in the market, you’re also increasing your share of mind… which leads to an increased share of market. What, exactly, is share of mind? Simply put, it’s what remains with the consumer even after they’ve stopped hearing from you. In a study conducted by the Marketing Sciences Institute and reported in The Journal of Advertising’s “The Earning Effects of Marketing Communication Expenditures during Recessions,” the authors noted that “increased ad spending during a recession not only works, but also contributes to financial performance for up to three years in the future, beyond when a recessionary period has ended.” Spend during a recession and consumers will be thinking about your business long after the downturn is over.
Questions? Thoughts? Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; to help you increase your share of mind and with it, share of market. For example, just recently we created ads that focus on how banks can help owners rebuild their small businesses. To see this campaign, both print and digital, along with others, visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.