And in any case, most businesses today already spend less than 50% on brand-building – dangerously below our recommended 60% – so there is certainly no sense in cutting brand building further unless survival depends on it. For marketers, recessions have historically been scary times. It would be the first since the “great recession” ended more than ten years ago. But this was much the same in 2008 and it was the brands that held their nerve – and share of voice – that bounced back strongly when recovery came. Research the customer.
The data covers inputs such as advertising strategy and budget, and a number of business outcomes, such as share and profit growth, allowing us to form a view about how the former influences the latter.The first caveat is that what we face is unlikely to be a ‘normal’ recession: it will be the first disease-driven recession of the modern era. Michelle Calcote King is an award-winning marketer with nearly 20 years of expertise in all things marketing, content, media and public relations.
At that point, no single firm gains much by that increase.
Among other tactics, the winners played offense by reinvesting selectively for commercial growth — including maintaining marketing while competitors cut back. McGraw-Hill Research looked at 600 companies from 1980 to 1985 and showed that those that maintained or increased their advertising spend during the 1981 recession had sales that were 256% higher than those that didn’t by 1985. However, because this was also the early period of big data, online advertising revenue actually grew by about 20% in 2008. By Jake Swearingen Updated on: January 31, 2008 / 6:42 PM / MoneyWatch What should marketers in a flat lining economy do? This may not be in the form of costly conventional advertising but could perhaps involve eye-catching initiatives that reflect the mood of the times. The study found that while most companies tightened their belts, the winners traded “lower short-term profitability for long-term gain, refocused rather than cut spending.”Specifically, the successful companies spent significantly more on selling, general and administrative (SG&A) costs (which include marketing) than those that lost market share. This last study did not review companies’ marketing expenditures and subsequent financial performance. This recession is unusual in that having a common enemy – COVID-19 – has generated a level of community spirit (toilet roll panic buying aside) that far exceeds that seen in previous recessions. As an example, the report cites Samsung, which maintained marketing investment and focused on rebranding itself as an innovative company during the Great Recession. Christian is Group Chief Strategy Officer at Ebiquity plc based in its London offices. Mike leads Ebiquity’s International Effectiveness Practice, helping brands to optimise marketing investments across multiple markets. The authors of the study opined that at the time — nearly 20 years ago — marketing played a more critical role than it did during previous recessions. Short-term activation makes much less sense, when either demand cannot be met or simply doesn’t exist. In this crisis we are not yet dealing with an elective decline in consumption but an enforced one that, at least for the time being, has implications for the tone of advertising. Pandemic-based downturns tend to be v-shaped and during the last 100 years most have lasted around a year, according to the Harvard Business Review. If people are demonstrating solidarity in adversity, then brands doing the same thing will earn their respect. A sharp recovery would be a departure from ‘normal’ recessions of the past, so the lessons from past recoveries may need to be reconsidered given this is an unprecedented, disease-driven downturn.The lessons for the marketing profession from the 2008 recession in the UK, for example, were clear, but they may not apply fully to our current situation. The scholars found that:“…most firms tend to cut back on advertising during a recession.
The study found that companies that increased their ad budgets during the recession grew sales much faster than those that did not, both during the recession and after it. The coronavirus pandemic threatens to plunge the world into the deepest and longest recession for almost a century.
The IPA Databank allows us to examine how the balance between long-term brand building and short-term activation influences the effectiveness of a campaign.
Group two had modest growth levels of ESOV in the range 0-8%. For some advertisers that don’t give cost incentives, they can change the ad message to being expensive but worth it. In 2018, the retail industry spent the most on radio advertising $502.8 million. He is based in our London office. However, because this was also the early period of big data, online advertising revenue actually grew by about 20% in 2008.
When a recession hits, the best course of action is protecting your investment. Gerard J. Tellis and Kethan Tellis Marshall School of Business University of Southern California. This was characterized by a shift away from purely emotional advertising as advertisers felt more serious approaches fitted the mood of the people.
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