Studies Have Proven: It Actually Pays to Advertise During a Recession.

Posted by truecreek on January 28, 2009 under Opinions. Everyone has them. | Be the First to Comment

A MarketSense study during the 1989-91 recession demonstrated that brands such as Jif Peanut Butter and Kraft Salad Dressing increased their advertising and experienced sales growth of 57% to 70%. During this same period, most of the beer industry made cuts to their ad budgets, but Coors Light and Bud Light increased their budgets and saw sales jump 15% to 16%. Among fast food companies, Pizza Hut sales rose 61% and Taco Bell’s 40% due to strong advertising support, reducing McDonald’s sales by as much as 28%. MarketSense concluded the study by reporting. “The best strategy for coping with a recession is balanced exploitation of ad spending for long-term consumer motivation, plus promotion for short term sales boosts.”

Strategies to help your business thrive in this economy.

• Don’t cut your ad budget, increase it. Let your competition cut their budgets. When you increase your spending, you increase your share of voice. If your competitors cut back, your message grows even stronger.

• Have a strategic marketing plan that is well thought out, so you don’t waste money advertising the wrong message in the wrong place to the wrong audience.

• Keep your loyal customers by keeping in touch with them and letting them know what you have to offer.

• Maintain your brand awareness. Advertising works cumulatively so you have to remind people frequently about your brand or they’ll forget you.

• Achieve greater media efficiency by taking advantage of more negotiable rates and special promotions.

• Don’t degrade your advertising by trying to save a few dollars on creative or production costs. Your customers will notice and will perceive lower quality not just in your advertising, but in your products and services.

This is one time to stress quality—and value. “All great enterprises move forward in a recession, and the weaklings move backward. The dumbbells cut back on advertising. The smart people don’t.” -Ed McCabe, founding partner of Scali, McCabe, Stoves advertising agency, a legendary Madison Avenue agency of years past.

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