Fortune Favors the Bold — And the Bold Keep On Marketing!
In the dark days of the Great Depression, when families huddled around their radios for news, entertainment and FDR’s famous fireside chats, the Kellogg Company made a bold move. It invested heavily in radio, introducing the nation to three characters named “Snap,” “Crackle” and “Pop,” whose “fairy song of health” could be heard in every bowl of Rice Krispies and milk. Meanwhile, industry leader Post cut its advertising significantly, yielding the market to Kellogg’s who grew profits by 30%. Kellogg’s eclipses its rival to this day.
In times of change, it is natural for human beings to think in terms of survival, which translates to actions that reduce or eliminate risk. For businesses facing economic recession, slashing marketing and PR budgets and keeping “survival” dollars in reserve is instinctive.
But ample data collected during both the Great Depression of the 1930s and the Great Recession of the 2000s indicates that a willingness to invest in marketing and advertising in down markets is a hallmark of the most resilient and successful companies.
Likewise, a McGraw-Hill Research study of U.S. recessions analyzed 600 companies in 16 industries from 1980 through 1985. It revealed that sales of business-to-business firms that were aggressive advertisers during the 1981-1982 recession rose more than 256% over competitors who axed advertising.
It may seem counterintuitive, but there are actually advantages to marketing in a down economy.
The Kellogg’s story is an example of how the “noise level” in a product category can diminish when competitors reduce ad spend and, because those brands lose “share of mind” with consumers, they also lose current and future sales. Increasing “share of voice” naturally leads to an increase in “share of market.”
Another advantage is that the cost of advertising typically drops during a recession. Brands may find opportunities to negotiate favorable advertising rates and lock them in for several years.
Technology has come a long way since the Great Recession, and with it, abundant sources of inexpensive digital marketing. According to emarketer.com, digital accounts for 50.1% of total media ad spending worldwide. And in contrast with the last economic decline, Facebook, Pinterest, Snapchat and Twitter are now public companies that rely heavily on digital advertising. These giants depend upon small business spending to keep their platforms profitable.
Neil Patel, co-founder of NP Digital and Subscribers, says, “The best time to double down is when others are not. You may not see the biggest return right away, but in the long term, you will.”
Digital marketing is a good value in any economy since it is both affordable and measurable. But e-marketers now enjoy another benefit: more consumers are online than ever before due to social distancing measures.
Here are some marketing strategies worthy of your bold investment:
Reposition Your Brand
Try looking at your brand through a new lens. Are there characteristics that you have not been highlighting, aspects that may be more valuable to your customers in the current market? Is your product or service essential? Or, is it a luxury at a thoughtful price? This is a good time to both rethink and restate your value proposition.
Show That You Are Here to Stay
In an increasingly unpredictable world, people are looking for companies and experiences that feel secure. Consumers seek the assurance of familiar brands. Project stability and gain consumer trust.
Less competition makes a recession the best time to launch a new brand or venture. If you are an established brand, use this opportunity to innovate and introduce new offerings. Is there a lucrative idea that has been on the back burner because you were too busy to pursue it before?
Offer Buying Incentives
With fewer dollars in their pockets and employment insecurity, customers are shopping for the best deals. Giving customers a good deal doesn’t always mean cutting prices. It could involve a temporary price promotion, a free trial, a free service add-on, free shipping, or alternative payment options like an installment or financing plan. Create buying habits and brand loyalty that will continue long after the recession.
When it comes to making decisions about where to invest precious dollars during a recessionary plunge, the experts are all in agreement: marketing spend is a must.
According to Harvard Business Review, “Advertising in an economic downturn should be regarded not as a drain on profits, but as a contributor to profits.”
And when asked what he thought about a past recession, Sam Walton, founder of Wal-Mart, said, “I thought about it and decided not to participate.”
Big Chief Creative Media helps enterprising brands to maximize their digital assets through strategic web development, social media, SEO, PPC, content, email marketing, video production and more. Contact us at https://www.bigchiefcreative.com/contact-us.