All of us in the publishing industry learned a lot — much of it the hard way — during the Great Recession. And now it’s important to share what we’ve all learned with our customers, partners and advertisers.
Today I want to share some information that will help your customers get through the coming months as the economy faces so much uncertainty.
“In the aftermath of the last recession in 2008, ad spending in the U.S. dropped by 13%,” writes Brad Adgate in Forbes. “Broken out by medium, newspaper ad spending dropped the most at 27%, radio spending dropped by 22%, followed by magazines with a decline of 18%, out-of-home by 11%, television by 5% and online by 2%.”
“Nonetheless,” Adgate continues, “there have been a number of studies going back nearly one century that point out the advantages of maintaining or even increasing ad budgets during a weaker economy. Those advertisers that maintained or grew their ad spending increased sales and market share during the recession and afterward.”
In other words, the old saying is right: “When times are good you should advertise. When times are bad you must advertise.”
Many of us now know this from personal experience: The brands that maintain a strong presence while others are backing down benefit from the lower noise level. This, Adgate reminds us, allows brands to reposition themselves or launch a product with less competition. If yours is the only mail in the box, it will undoubtedly have a better chance of being read. We saw that time and again through the previous downturn, and direct mail is positioned to thrive right now. We expect the same of advertising in general.
As advertisers pull back, it creates a buyers marketer, and a brand that takes advantage of this can often stretch their ad dollars quite a bit further and grab a larger share of the voice. And as Adgate notes, “an increase in share of voice typically leads to an increase in share of market. An increase in market share results, with an increase in profits.”
There’s another reason to continue to advertise during hard times, and it’s critical for coming out strong on the other side of the downturn.
“Brands can project to consumers the image of corporate stability during challenging times,” Adgate explains. With trust such an important part of the modern consumer relationship, a stable image and a “we’re not going anywhere” attitude positions your brand for quick take-up and growth when the tide turns … as it invariably does.
Adgate gives some great examples of brands that went big with advertising during historic turndowns – like Kellogg, which managed to snag the leader spot away from Post during the Great Depression, or Toyota, which surged ahead of Volkswagen to become the top import during the energy crisis of the ‘70s.
Amazon is the modern-day success story; Adgate notes their sales “grew by 28% in 2009 during the ‘great recession.’ The tech company continued to innovate with new products during the slumping economy, most notably with new Kindle products which helped to grow market share.”
In all of this, it’s important to remain cognizant of your tone, especially now when people are nervous, possibly scared. It’s easy to be painted with the “tone deaf” brush, even with the best intentions. So be aware of creating the right message in the time of COVID-19.
“Perhaps the best quote about advertising in a recession came from Sam Walton, the founder of Wal-Mart. When asked, ‘What do you think about a recession?’ he responded, ‘I thought about it and decided not to participate.’”
VP of Sales & Marketing, Freeport Press