Should I Advertise in a Bad Economy?
In the early 1950s, a public service campaign featuring a monkey and tortoise introduced the slightly bizarre ‘duck and cover’ – quite literally, bending down and covering your head with your arms – as the standard method of protecting yourself against a nuclear attack. It seems laughable now, but the US government was pretty serious about it at the time. Of course, they never actually believed in anything that was being said in the ads, but they knew that people needed to feel like they were prepared, so that should the worst case scenario occur, they had a way of protecting themselves. It meant that people could sleep a little easier and not worry about the Russians and their nuclear arsenal. Ignorance is bliss, right?
We can all have a good laugh at the expense of our previous generations, but perhaps we should think a little bit before we assume that we are beyond this kind of thinking. With the global financial crisis upon us, everyone is scared. Unshakeable pillars of our financial world have crumbled into dust, and others are being propped up by a makeshift pieces of two-by-fours and good will. Uncertainty is everywhere. And nobody likes uncertainty. Terrified companies are cutting themselves down to the bare bones, putting up the storm shutters and praying that the typhoon passes quickly. Spending money at this time seems counterintuitive. But just like ducking and covering, refusing to spend only provides a false sense of security.
In order to stay afloat in business, irrespective of the overall economic conditions, you have to grow. And growth can only be achieved by creating new business. That’s why it is backward thinking to sever the spending that generates new business. During a recession, companies need new business more than ever. And as one of the most effective ways of drumming up new business is advertising, the question must be asked: why would you stop advertising? It’s a simple path of logic that clearly shows that stopping would be illogical. During the treacherous financial straights of 1974 and 1975, the American Business Press collected some rather compelling data that showed that “Companies which did not cut marketing expenditures experienced higher sales and net income during those two years and the two years following than those companies which cut in either or both recession years.”
With all of this being said, we’re not saying that everyone should just carry on like normal. Certainly, the state of the market demands that we make adjustments, advertising messages and approaches must be tailored to fit: for instance, the shift from people’s wants to people’s needs is crucial. Also the mediums and methods of advertising must be cost effective and well thought-out. Really these should be serious considerations in any financial environment, but certainly, in these specific times, these factors have increased poignancy.
The simple point to all of this is that companies that continue to advertise and go after new business during this recession will inevitably emerge stronger and more competitive than those who are refusing to spend. Now is not the time to duck and cover!
By Noel Fox and Tim Yu
Team Cowie and Fox
http://www.cowieandfox.com
1 How Advertising in Recession Periods Affects Sales. American Business Press, Inc., 1979
Tags: advertise, advertising, bad economy, new business, recession