Business owners everywhere are faced with the tough task of keeping the company afloat during this current economic downturn. An obvious first step to fiscal responsibility is to cut costs in any way possible. You may be tempted to slash spending across the board, but you should be aware that experts in the field have determined that scrimping on your advertising budget during tough economic times is not necessarily the wisest course of action. Under certain circumstances it may even make economic sense to increase your spending on advertising for your business.
Increase Market Share
Disposable income is scarce and the consumer is tightening his belt, too. Competition for available dollars is fierce and now, more than ever, you need to keep your name in front of the buyer`s eyes while he or she is deciding where to spend those dollars.
If your competition is forced to cut spending on advertising, this is the time to capitalize on the old adage "out of sight, out of mind." An aggressive advertising campaign is exactly what you need to convert the market share left on the table by your competitors` lack of visibility.
More Cost Effective Advertising Available
With a decrease in demand for advertising you should be able to find more cost effective advertising made available to you. If you`re in a position to maintain your current level of spending, you can take advantage of reduced rates and potentially realize a higher return on your advertising investment.
Protect Your Brand
A recent Ad-ology Research study took a look at the U.S. adult consumer`s perception about businesses that continue advertising during a recession versus those that cut back. They found that 48% of those surveyed believed that a retail store, bank or auto dealership that ceases to advertise during a recession must be struggling to stay in business. Conversely, companies that maintained a strong presence in the market via advertising were viewed as competitive or committed to their endeavors.
When it comes to allotting advertising dollars during a recession perhaps the most convincing data in favor of increased spending comes from a McGraw-Hill study that charted the course of 600 companies from 1980-1985. Businesses that continued to advertise during the 1981-1982 recession realized a 275% increase in sales while companies that decreased their advertising saw only a 19% increase in sales. The study also showed long-term gains for those companies that continued to advertise, as they were able to keep those new customers after the economy recovered and were well positioned for continued growth.
When the economy does reach an upswing you want your business to be as robust as possible and keeping your name in front of those with purchasing power – especially while times are tough –- will go a long way to helping you do just that.
McGraw-Hill study source:
http://www.prlog.org/10155568-it-pays-to-promote-during-recession.html
Ad-ology Research study source: http://www.reuters.com/article/pressRelease/idUS165508May-2000
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