It’s a common practice for companies to axe their advertising budgets when they enter tough economic times. Everything is going good until there is a change in interest rates or the market, and suddenly everyone seems not to be spending as much. Sales begin to drop and you start looking at ways of salvaging money – with the quickest and easiest to cut being your advertising budget.
We’ve seen it all before and it’s not pretty.
Although it seems counterintuitive, bad economic times are actually the time when you should be advertising the most. It is a rare opportunity to achieve growth and set your business up for a more powerful comeback when the economy revives itself.
Research shows that if you do this, you will actually come out on top. A study done by McGraw-Hill Research that analysed 600 companies from 1980-1985 found that the businesses that maintained or increased their level of advertising during the 1981 and 1982 recession had much higher sales after the economy recovered. Companies that advertised heavily during the recession had sales 256% higher than those who did not.
Opportunity 1 – Reduced Competition
One of the best things about a scary marketplace is that the majority of your competition is also scared to advertise. This means that if you do choose to advertise, you’ll be up against substantially less competitors. Take advantage of the vacant stage!
This can be a great branding opportunity, because you’ll be one of the only brands people see for the length of the economic period. When the economy eventually corrects itself, you would have built strong brand awareness with your target audience.
Opportunity 2 – Better Advertising Deals
When the market turns, advertisers feel it first. This results in a lot of advertising media outlets cutting their prices for media time.
This is a great opportunity for negotiating for as much exposure as possible with more leverage than you would normally experience.
Opportunity 3 – Forming A Closer Bond With Your Target Audience
Audiences respond to being understood by their advertisers, and no period of time requires more understanding than a recession.
Don’t be afraid to address the recession in your advertising. People appreciate that you recognise the difficulty they are experiencing purchasing your product and that you’re making adjustments to suit them.
Recessions are scary times because they require a lot of faith in order to make it through. You’re going to feel a strong urge to want to take the ‘safe’ route and cut costs, but in the process you’ll cut off your source of growth as well.
Have faith and believe in your advertising budget!
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