Published by Mancuso Media
Amid growing concern about the COVID-19 pandemic, business owners are facing fears about an economic downturn. Frequently in these situations, businesses look to reduce their spending, and sometimes the marketing budget is the first to be cut. We’ve done some research and have found there are actually great advantages to maintaining or in some cases increasing advertising spending during a weak economy.
There are multiple reasons to consider continuing to advertise during a downturn. We’ve boiled down some that were aptly described in this Forbes contributor piece and added a few of our own:
- Your competitors may cut back on their ad spend, increasing the opportunity for your business to gain market share in your product category.
- If you’re nimble, look to have technology help you to re-position your brand or introduce a new product or service that is in need during this time.
- Continuing to advertise allows people to connect with you in different ways, via a virtual consultation (Skype, Google Hangout or Facetime) if they are unable to leave their homes.
- Maintaining your advertising presence can help project stability and a sense of “normal” during these challenging times.
- Advertising costs tend to drop during recessions or periods of instability, creating a “buyer’s market” for brands that continue advertising. This is especially true today with television advertising, which has been taking many cancellations. The available inventory is an opportunity for picking up market share or adding a new advertising channel for those businesses that haven’t advertised on television before.
- Out of sight, out of mind. Cutting back on ad spending has the potential of losing current or future sales due to loss of “share of mind.” Typically, an increase in “share of voice” from continued advertising leads to in an increase in “share of market,” followed by an increase in profits and long-term gains.
Specifically, in regard to COVID-19, whether you are marketing to the world, on a national level, or locally, your marketing messaging will likely need to change. You want your customers to understand you are sensitive to the current climate. Looking at ads over the past few days of huge brands who haven’t been nimble enough to update their advertising messaging on television or online comes off as tone deaf, and your customers will react negatively to this if not handled properly or in a timely manner.
There is a delicate balance with advertising right now. You don’t want to ignore what is happening worldwide, but you don’t want the perception that you are capitalizing on this as an opportunity, either. Look at what your business does well, how your product or service helps your customer, and put yourself in their shoes at this moment so your messaging can be about how you can help them today. Relay what changes you have made or are making and point out the value you bring to them and that you’ll be there now and in the future.
Whether or not you want to give a price incentive to move product is a moot point at this time. If you are able to discount and you think it will benefit your customer then do so, but you don’t need to be a low-cost leader in this circumstance. It is most important that your customers are able to find you and know that you have their back, that you are doing what you can for them to make them comfortable in their experience with your business and how you intend to fulfill their needs.
History shows us that even through tough economic times, advertisers that maintained or grew their ad spending increased sales and market share during these timeframes and afterwards. Here are some specific examples from the aforementioned Forbes article:
- During the Great Depression, Kellogg’s doubled its advertising spend and overtook rival Post, which had cut its advertising budget significantly; Kellogg’s saw its profits rise by 30% and became a leader in the dry cereal category, a position it has maintained for decades since.
- During the 1990-91 recession, McDonald’s dropped its advertising spend, leaving the door wide open for Taco Bell and Pizza Hut – Pizza Hut sales increased by 61%, Taco Bell sales grew 40%, and McDonald’s sales decreased 28%.
As the adage says, “When times are good, you should advertise. When times are bad, you MUST advertise.”
Feel free to contact Mancuso Media if you need additional marketing advice or help with updating your current marketing messaging.
