It’s well-known among advertising and marketing pros – those companies that maintain or, ideally, increase their marketing dollars during a recession will gain market share and a better return on their advertising investment. Today, the market place seems to be holding its breath (particularly after last night’s firesale of Bear Stearns), and there’s a lot of uncertainty and confusion.
During times like these, business owners may be inclined to pull back on marketing because there are employees to pay and inventories to maintain – and marketing can be seen as just an expense on the balance sheet. But that’s a mistake. Here are just three reasons why you should maintain or increase your advertising during a recession:
- You’ll stand out from your competitors who cut back, and probably eat into their marketshare.
- Customers need to know your name now – people still need goods and services, not matter what the economic climate…and they tend to turn to trusted names and brands during a down economy.
- Customers will remember you when the economy picks up again.
But don’t just take my word for it. John A. Quelch, the Lincoln Filene Professor of Business Administration at Harvard Business School, posted this article – Marketing Your Way Through a Recession - a couple of weeks ago. Or take a look at Marketing Lowdown: Ad Spending During a Recession by Robert Grede, best-selling author of Naked Marketing: The Bare Essentials.
Reason number 4: to help keep me in a job!
Reason No. 4 may be be true – who isn’t looking to keep a job, no matter what the economic realities?! – but it doesn’t negate what I said.
In addition to providing market-growth opps, recessions also have a way of bringing out tremendous innovation both in product development and in branding.
Check out this piece from this week’s Ad Age magazine: Recession Can Be a Marketer’s Friend (http://adage.com/article?article_id=125877)
Of course, companies always have to be careful not to panic – check out the sidebar about Taco Bell’s decision to cut prices during the recession of the early 1990s (59-cent burrito anyone?) and the long-term, negative effect many feel it has had on that company’s growth prospects.
A recessionary adage (modified for the weak of heart): “when red wine is running in the streets the way to make money is buy assets.”