One of the things that I learned, over and over, was that companies that stop advertising, or sharply cut back their advertising, during a recession are being shortsighted. While they may save money in the short run, they are shooting themselves in the foot for the long run.
A number of advertising research studies have been done showing that companies that chop their advertising in a recession lose more sales and lag behind when the recession ends. Those companies that maintain their advertising lose significantly less sales and bounce back faster as they come out of the recession.
This had already been proven over several recessions in the early 1970s when I started out in the business. We’ve had more recessions since then, it continues to be proven by research, and the majority of companies continue to ignore it.
IGNORING THE FACTSIf it makes sense to advertise in good times when products are selling well so that you can sell even more, then why wouldn’t it make sense to advertise in bad times when your sales slow down? Do you believe the best way to take your products to market is by shutting down your ad program — going from top of mind to out of sight, out of mind?
If your advertising disappears during a recession, while your competitor continues to advertise at the same level, it gives the appearance that your company may be struggling while your competitor appears to be going strong. Why should your customers stay with a company that’s uncertain and weak? Why shouldn’t they consider jumping ship and going with a stronger competitor?
If you don’t have the corporate strength and confidence to advertise in bad times as well as good, why should a customer have any confidence in your brand?
Staying top of mind is essential. If you fade away at the first sign of adversity, what kind of signal are you sending? When the ad people tell you image is everything, they aren’t kidding. When you present the image of a company that’s suddenly and swiftly pulling back the reins, there has to be a reason. And many customers will assume the worst.
You can’t afford to disappear from the marketplace. The brand that stays, the one that continues advertising, is the strong brand. It’s still there — consistent, reliable, and dependable.
COMMON SENSEWhen you think about it, it’s not surprising that common sense still applies in the business world. When you present the image of a loser who’s forced to cut back, you’re perceived as a loser. When you present the image of a winner who keeps chugging right along, you don’t lose.
I wonder how many more years and how many more recessions will pass before most companies learn that cutting advertising in bad times is a bad idea? I suspect that most businesses will never learn. That’s because it’s a knee-jerk reaction to cut, and most follow the common, knee-jerk reaction of the majority of their peers. The smart companies ignore the pack, stay the course, and make more sales and more dollars over the long term.
Short-term thinking very often gets companies into trouble. You may maximize profits this quarter, while you restrict profitability for the next three quarters. If you’re in business for the long haul, why wouldn’t you take the long view? Just remember, when you cut to the bone, you may very well bleed to death.
Mazurkiewicz is news and legislation editor. He can be reached at 248-244-6459; 248-362-0317 (fax); gregmazurkiewicz@ achrnews.com (e-mail).
Publication date: 01/21/2002