Extra Edition / Business Management

Think Twice Before Cutting Your Advertising Budget

March 9, 2009
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The immediate reaction by many companies during a recession is to cut their advertising. Advertising is seen as an expense and all expenses are subject to trimming in difficult times. However, advertising should be looked at as an investment that helps to increase your sales now and in the future.

A number of studies show that companies that keep on advertising during a recession do better than their competitors. Ed Clark of The Clark Company, an advertising agency, cites several of the most significant studies in his article “Recession Marketing Strategies” posted on the company’s Website (see www.clarkadspr.com/jobarticles/111501.html). Basically, what these studies show is that companies that continue advertising during a recession generate more sales and those companies that cut advertising are negatively impacted during and immediately after the recession.

So why do companies that keep on advertising do better? Here are some reasons:

SALES DON'T DISAPPEAR DURING A RECESSION

The majority of your residential customers (and prospects) remain employed. The majority of your commercial customers (and prospects) are still in business. These people and companies still need your products and services. Sales may decline. But sales don’t disappear in a recession.

Even if replacement sales drop, customers still need to get their HVAC systems serviced. And their systems will still need a tuneup to prevent expensive problems down the road.

Since there is still going to be business out there, promote your service capabilities and expertise. Promote the need for system tuneups to avoid costly breakdowns during the extreme heat of summer.

Keep advertising while your competitors slash or eliminate their advertising and they essentially will fade from view and become invisible in the marketplace. Your company, on the other hand, will become more visible and more prominent in the market. You’ll gain top of mind exposure with less advertising clutter. Which brings us to the next reason:

A RECESSION ACTUALLY PROVIDES AN OPPORTUNITY

If your competitors do indeed chop or eliminate their advertising as many companies do, you can stand out in the market while they stand down. They’re retrenching and tightening their belts. If you’re still advertising, you demonstrate that you’re a solid, healthy company that can handle tough economic times.

And advertising while competitors cut back gives you the opportunity to gain market share. If the competition is willing to stand on the sidelines and watch during a recession, then take away some of their sales with an aggressive ad campaign. Let prospective customers know you’ll be there for them today and tomorrow. You’re not pulling back, you’re moving forward. Establish a greater presence and go after more business.

Even if you simply maintain your advertising, it will help you maintain sales and market share. It costs less to maintain market share than to lose it and try to gain it back later.

And here’s another reason to continue advertising:

THE RECESSION WON'T LAST FOREVER

It’s always better to take to take a long-term rather than short-term view. As Clark says in the article mentioned above, the typical recession lasts for about a year. This one has already been going on for over a year according to those who officially declare a recession. So if the bottom isn’t already here, it will be before long.

Plan for the future. Plan for coming through the downturn as strong as possible in as advantageous a position as possible. Don’t give up sales. Don’t give up market share. Look to build sales and market share.

Advertising has been and remains the most cost efficient way to make a significant - and lasting - impression on your market. But it requires strategic, well thought out advertising. It requires good advertising. And, most importantly, it requires consistent advertising.

An example of the value of consistency: A former colleague told me that the company he worked for ran a small ad in the Wall Street Journal once a week for many years. Since they ran their ad for a number of years, that means they advertised in good times and bad. And a customer once remarked to that advertiser, “I see your ad in the Journal every time I read the paper.” Even though the company did not advertise every day of the week, the customer saw their ad so many times over such a long period that he believed their ad was appearing in every single issue that he read. That’s the power of consistent advertising.

An advertiser who flits in and out of various advertising vehicles, running ads here and there when times are good and immediately cutting the budget and disappearing when times are bad, is not realizing the full value of advertising. In that case, you’re only gaining fleeting impressions. So in a recession you might as well resign yourself to hunkering down and waiting till next year.

But the best companies don’t take a year off. They continue their marketing plan, keep working their strategy, and keep moving ahead.

Before joining the editorial staff of The NEWS over 12 years ago, Greg Mazurkiewicz worked in public relations and advertising for more than 20 years. In this periodic series of articles, he will share some of his expertise in the field of marketing communications.

Publication date: 03/09/2009

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