Wall Street seems to be weathering the economic fallout from the recession to date, but it looks like C-Levels aren’t as optimistic about marketing budgets – even with audiences consuming more media than ever by spending more time at home and watching election coverage, fall ad sales are dropping across the board (see Google, Facebook, Fox, Viacomm, WPP, and more). It can be tempting to follow the pack and think defensively about how to preserve budget for when consumers are spending more again. While that may seem to make some short-term sense, longer-term, how is this setting your company up? What is this telling your consumers – that you are only willing to invest in them when you have something to gain financially?
We have a lot of data about what happened during the Great Recession of 2008. It was a challenging year for everyone, especially marketers. Budgets were slashed, jobs were cut. However, the real winners were the companies who kept investing in marketing. Harvard Business Review points to a study from the last recession suggesting that companies who did not cut marketing budgets, or in some cases invested MORE in marketing, bounced back most strongly post-recession.
Fear is a strong motivator for cutting budgets, but choosing optimism and creating more customer value shows your customers not only that you are stable, but will build brand loyalty unmatched by ROI-generating promotional campaigns to drive sales. They’re looking for companies and brands that they can depend on to be there through the long haul. The winners don’t flip flop on high/low pricing strategies and constant sales. They change strategies and figure out ways to provide MORE value to consumers, like Coca-Cola did this year by celebrating everyday heroes, or they show motivational messages about pulling through, like Nike. Take Under Armour, who is using the recession to reinvent itself amidst struggling sales.
When you’re weighing whether or not to cut your Q4 marketing budget this year, think about the winners from the last recession who showed strength and stability, and think about what you want your brand to stand for. Challenging times are meant for doubling down on how to create more consumer value, not pulling back.