ZDO Blog
Kick 'Em While They're Down
You're in a crowded room. Everyone's talking over each other and you have something important to say. You have two options: try to shout louder than everyone else or hope everyone else shuts up.
That second option may be exactly what this looming-maybe-a-recession treats you with. Every day Americans are exposed to anywhere between 300 and 1,000 (some reports say 3,000) advertising messages. That is serious clutter.
To protect short-term profitability many companies make the "easy" cuts. They slash advertising and marketing budgets. Nobody has to lose their job and no production lines need to shut down.
Unfortunately, like most of life, the easy answer often isn't the best answer.
History shows that companies that maintain and/or grow their advertising budgets through a recession experience marked sales growth and market share growth not only for the recession years, but for the immediate years following the recession as well. If you have a strong brand going into a recession, the last thing you want to do is neglect it. You also miss an opportunity to put pressure on competitors who aren't willing or aren't able to respond to your aggressive position.
Take the recession of 1989 to 1991 for example. In a comparison by MarketSense of 101 household name brands, Jell-O, Crisco, Hellman's, Green Giant and Doritos watched sales plunge by up to 26 to 64 percent. During that same time Jiff peanut butter increased ad spending and was rewarded with a 57 percent growth in sales.
McGraw-Hill Research Laboratory of Advertising Performance reported that after the 1981 to 1982 recession "business-to-business firms that maintained or increased their advertising expenditures during the 1981-82 recession averaged significantly higher sales growth both during the recession and for the following three years than those which eliminated or decreased advertising."
And the statistics go on. With reports going all the way back to the 1923 recession, the same has been shown time and time again.
So what gives? If the benefits of increasing advertising during a recession are so documented, why are so many companies cutting back? Because it's hard. It's a tough sell to a board of directors and shareholders that now is the time to invest heavily in advertising and branding. It takes a leader with real vision and courage to weather the nay-sayers and take a risk.
But, as General Patton said, "Accept the challenges so that you can feel the exhilaration of victory."
16.09.2008. 11:13
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