Marketing in a Recession: The Best of Times or the Worst of Times?
Monday, April 21st, 2008
Pick up the newspaper: Our country and the world are in a state of anxiety about the economy, especially in light of a potential recession. What does that mean to us as marketers? Just how does the recession affect direct response advertising? Recessions are different from other economic downturns and need to be approached differently, but there are ways to weather the storm.
History teaches us that recessions reward the aggressive advertiser and penalize the timid one. Indeed, firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising.
By 1985, sales of companies that were aggressive recession advertisers had risen 256 percent over those that didn’t keep up their advertising. Why? One reason is that a recessionary market can provide an opportunity for businesses to build a greater share of market through aggressive advertising. Sometimes, we need to remind ourselves about the short-term benefits of advertising: It creates sales immediately; it generates added business from current customers; and it brings in new leads and prospects. In short, as one marketer pointed out, “When times are good, you should advertise. When times are bad, you must advertise.”
One trait of a true recession lies with shifts in consumer patterns. We can no longer expect even our core base of customers to behave in ways familiar to us and comfortable to them. Preparing for changes in consumer behavior will allow us to jumpstart new messaging, platforms and technologies—when this makes strategic sense—to capture the attention of both loyal and new customers. One false assumption is that it’s safe to reduce the advertising budget if the competition is reducing theirs. Research shows that companies maintaining or increasing advertising during periods of economic slow-down will boost market share. (more…)
Some say that ERA appears to have abandoned its original DRTV members in favor of online technologies and advancements. I want to say without any qualms that ERA has not abandoned the DRTV segment of the membership at all. Indeed, DRTV is alive and well at ERA and the association’s commitment to it is demonstrated in many of its offerings, from education and research to the self-regulatory program, and to government affairs advocacy.
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