Advertising in a recession

The message of the times is inescapable: we are facing a downturn, the markets are falling and consumer confidence is weakening. There’s an almost audible groan across the globe – the sound of people tightening their belts. So, by how many notches, if any, should your marketing budget affect your waistline?

Traditionally, marketing budgets are one of the first casualties of a downturn. But, this paradigm has changed and for good reason. Now, more and more businesses are recognising the importance of having a definite advertising strategy during such times – a strategy that helps a business stay on course and come out the other side in a strong position. The rewards are there for those who keep on course and boldly advertise where others fear to go.

In fact, studies show that businesses that have a plan and continue to market themselves in a prudent way during a downturn do better than their competition in the long term. The strong, well built and best managed brands will survive and may even get stronger – the weak will decline and may very well die.

Experts agree, maintaining or increasing advertising budget levels during economic downturns may be necessary in terms of protecting market position and even increasing sales in the long term. In other words, it is vital to keep your brand working for you during down times. All that brand equity you have built up is, in effect, money in the bank. To withdraw it would only mean you would have to spend a whole lot more rebuilding your brand later on. Besides, in maintaining your brand’s presence you are sending the message to your customers that your brand is open for business. You can only confirm and encourage your customer’s confidence in that brand.

Your strategy may include a more aggressive foray into e-marketing or a more targeted approach with a direct mail campaign. You may have to concentrate on your loyal customers and invest more into a retention strategy. At The Idea Works, our experience has given us insight into how to tailor your advertising campaign according to the situation and how to communicate in tough times. It’s not the time for the faint hearted – the US business media say “When times are good, you should advertise; when times are bad, you MUST advertise”. A downturn can prove a good opportunity to steal your competitor’s share of voice and pick up some good bargains in your media buy.

Tightening the belt does not have to be too painful. Done in the right way, with the right advertising plan, there are opportunities to be had in these uncertain times.