Marketing personnel, advertising agencies and clients are all debating whether to hunker down or continue marketing during the current business climate. Typically, marketing budgets are cut during tight times, when the opposite is the best answer for business success.
This is not the time to cut. We have seen documentation that dates to the 1920’s, showing how advertisers can gain marketshare during downturns and do it at a lower cost. These companies can also solidify their existing client base and build equity while treating marketing as an investment. NW Ayer Inc’s report, Advertising During a Recession: Key Issues and Opportunites published in 1991, offers some excellent research.
One example, quoted by Wall Street analysts, attributes the 1975 slide of Avon Products and Hershey Foods at least in part to advertising cuts, and credits heavier advertising for the improved performance of Philip Morris and Revlon during the same period.
But most businesses are not the behemoths like Revlon and Philip Morris. This makes it even more important to keep marketing in tough times. Smaller businesses may have a protected market niche or may be able to reduce expenses quicker. Smaller businesses can also innovate products and services faster to meet whatever needs they do find in the customer base.
A recent Forrester Report on Interactive Marketing mirrors the old research and takes it a step farther – now looking at social media. Josh Bernoff opines that measurable efforts may be ok during a downturn and that social applications may actually thrive.
Jaap Favier, Vice President, Research Director, Forrester Research Recession, takes it farther and is shown here describing how it will involve firms responding to the change in consumers core needs by getting them more involved in the ‘pull’ of information, versus the ‘push’ of advertising.