You can’t hide from it. Everywhere we turn economies are crumbling under financial pressure and here in the UK there’s talk of a recession looming. Consequently it’s no surprise to see companies starting to batten down the hatches, eager to reign in their marketing budgets. Of course, you shouldn’t be throwing money around in these times, but essentially, reducing spend is merely a short-term solution. Those with enough foresight know that to ride out the storm the marketing budget is the most valuable resource to have and must be saved from the wielding axe.
Proven research by Millward Brown (PDF), based on previous recessions, concluded that those companies who cut advertising spend in a recession lost market share to competitors and struggled to win this back when the economy recovered. On the other hand, those who continued with ad spend achieved greater sales growth and came out of the recession better positioned against competitors.
The key is to stay at the forefront of consumers’ minds and plan for recovery. That way you will not be playing catch up when recovery does set in. Take the likes of Barclaycard, Renault and Nescafe who all advertised throughout the last recession. Their approach paid off. Each one boasted increased market share and return on investment as a result. Barclaycard, struggling prior to the slump, reported a 50% rise in new credit card holders and returned to profitability; Renault out-sold competitors; and Nescafe saw a return of £50m sales increase from £5m investment.
So you’ve managed to hang on to some kind of budget, but results matter more than ever. How do you make every penny count? Simple; look to online.
Digital media is becoming ever more sophisticated and established in providing the most cost-effective marketing solutions. No longer do you have to presume who was watching your TV ad and how many of those actually turned into sales. From search to affiliate marketing, EVERY click and conversion and each user’s behaviour and browser time is trackable in the online world. This means targeting to the nth degree is possible and wasted exposure cut to the absolute minimum. All this for a fraction of the cost of traditional media where you can be as flexible as you like.
Now you know you are speaking to exactly who you want, when you want and aren’t paying through the roof for it. As for those accountants, although brand building and maintaining awareness should be at the forefront of strategy in a recession, online also gives the opportunity to measure the exact return on investment.