Why 10 Leading Marketing and Business Experts Warn Against the All Too Common Mistake of Cutting Marketing Budgets in a Slow Economy
Imagine reading a newspaper that has one and only one advertisement. You would notice that advertisement. You might even marvel at it. Now imagine the same newspaper with 50 advertisements. Would you still notice that one advertisement? Not likely.
When all other advertisers cease their marketing efforts, the advertiser who stays in the media is the one who catches the readers’ and buyers’ attention. But don’t take our word for it: consider what the experts say.
“Successful companies do not abandon their marketing strategies in a recession; they adapt them.” The venerable Harvard Business Review instructs business owners in “How to Market in a Recession” to adapt marketing strategies rather than cut them. “Instead of cutting the market research budget, you need to know more than ever how consumers are redefining value and responding to the recession….This is not the time to cut advertising….Brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.”
“Prospects are more likely to recall marketing messages delivered consistently during a fragile economy, even if they are smaller and less frequently delivered.” Jay Levison, veteran marketing consultant and author, warns in his book, Guerilla Marketing During Tough Times, that “…many companies have scrubbed or reduced their marketing budgets to combat tough times and that it will cost those firms three dollars for every dollar formerly spent to reach the same level of consumer recognition and share of mind they previously enjoyed.”
“Cutting your marketing spending is a sure way to give ground to competitors who may be more aggressive during the downturn.” An article published on business mogul Bloomberg’s BusinessWeek, “5 Don’ts for Marketing in Down Times,” offers that “just as the savviest investors view down markets as a time to buy when everybody else is selling, the savviest marketers know recessions are a great time to pick up market share. They understand that by maintaining their budgets (or even increasing them) they may not come out ahead during the down times, but they can pick up market share that will pay off in the long run.”
“Research shows that companies that consistently advertise even during recessions perform better in the long run.” A Wharton University article, “When the Going Gets Tough, the Tough Don’t Skimp on Their Ad Budgets,” urges business owners to continue advertising. “A McGraw-Hill Research study looking at 600 companies from 1980 to 1985 found that those businesses which chose to maintain or raise their level of advertising expenditures during the 1981 and 1982 recession had significantly higher sales after the economy recovered. Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise.”
“Become proactive rather than reactive.” The book, How to Up Your Profit in a Down Economy, by author and advertising copywriter Robert Boduch, encourages business owners “to make it a habit to reach new prospects every week – better yet, every day….To generate new customers consistently, you need a continuous marketing action plan.”
“With the right advertising tactics, a downturn can actually provide opportunities for online marketers.” A Google Adwords acticle, “Top Tactics for Tough Times,” suggests that “Now more than ever, your customers are relying on the Internet to help them make the best purchase decisions during tight times.”
Online “communities and social networking sites are cost-effective and have a measurable impact on prospects’ decisions in the consideration stage, which will be important to companies under recessionary pressures.” Josh Bernoff, Sr. VP Idea Development for Forrester Research, one of the leading IT, marketing, and technology research and consulting companies, writes in “Strategies for Interactive Marketing in a Recession” that “interactive marketing programs are now fueled by measurable results.” Bernoff suggests that “interactive marketers should stop toe-dipping and invest only in programs that can deliver on measurable metrics.”
“What you have to think about is whether increased spending will give you an even greater return.” An article in the Search Engine Guide, “How to Get the Most Value From Your SEO Investment,” explains that “spending less would be nice, but you have to get out of that mindset. Target, Walmart, Pepsi and Coke all continue to spend, spend, spend on their marketing because they know it gets results. And the second they stop spending, they know they lose market share to their competition.”
“Today, as web browsing has become more and more pervasive, the way people shop has changed.” Google’s Jim Lecinski defines “What the ‘Zero Moment of Truth’ Means for Marketers” and explains that “long before shoppers find products on a store shelf, they search for the best options online. By the time they make a purchase, they have read reviews, compared prices and fully evaluated their options, whether they are buying a pillow or a Porsche.”
“As Americans spend more time online for information and entertainment purposes, digital advertising and marketing has emerged as one of the most effective tools businesses have to attract and retain customers.” The Interactive Advertising Bureau (IAB) reported “Internet Advertising Revenues Hit $7.3 Billion in Q1 ’11,”a 23 percent increase in the first quarter of 2011 over the same period in 2010. “This marks the highest first-quarter revenue level ever for the industry and a significant increase over last year’s first-quarter revenue level, which had been the highest on record to date,” stated the IAB. “The consistent and considerable year-over-year growth we’re seeing demonstrates that digital media is an increasingly popular destination for ad dollars, and for good reason,” said IAB President and CEO Randall Rothenberg.
“Now is exactly the time to take advantage of marketing, and to use it strategically, proactively and effectively,” counsels Allen Levine, a respected marketing consultant to the legal industry, in his article “Marketing in Tough Times.”
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