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Big Promotions.net, Advertising Specialties, Dallas, TX

Truths About Marketing During A Recession

by Susan Morgan on June 17, 2009

There are some things we just want to believe… weight loss can come without effort or willpower… politicians will keep election year promises… professional athletes play fair… money isn’t everything. Sure a part of us knows the truth… but the lie is just so… tempting. It could be true… we want it to be true.

So it’s probably no surprise that marketers have their own version of an oft-repeated “truth”, one that is readily accepted at face value and regularly repeated by experts. In a smart and intriguing online piece by Philadelphia-based marketer Christian Shea, the research-backed truth is given in it’s entirety…

“All the research shows that companies that spend on marketing during a recession come out ahead of the competition as the economy rebounds.”

Sounds good, right? Combine this statement with the stories of both Proctor & Gamble and Chevrolet during the Great Depression and you’ve got many business owners wondering about the wisdom of cutting those marketing budgets.

Only Shea won’t let us accept this statement so readily… using the online piece to shine some light on the research (articles or papers) often said to support this idea. It’s important to understand that not all studies are created equal… and that research conclusions aren’t always easy to fit into a sound bite or headline. When it comes to increased marketing spending during a recession, Shea’s search uncovered 6 studies to support the idea — 2 from 1979, 1 from 1980, 1 from 1982, 1 from 1986, and the most recent in 1993. Not exactly the most current, are they?

The 1986 study, out of the Laboratory of Advertising Performance at McGraw-Hill, looked at the 1981-1982 recession and is the one most often quoted by marketing experts. The idea here is that if you cut your communications to your customers (either current or potential ones) and your competitors increase their communications, customers will probably move to the company that’s working for their business. Makes sense, right?

Fast forward 23 years to the most recent research from a 2005 study that appeared in the International Journal of Research In Marketing titled “Turning adversity into advantage: Does proactive marketing during a recession pay off?“. This work discusses proactive marketing during a recession, agreeing that companies who actively market during a slow economy claim positive results from the effort. Seldom mentioned is the caution of the researchers — this advice does not apply to all businesses.

The thinking is that hugely visible consumer brands… MAC or Coke for example, are better served by not cutting marketing campaigns during these times. The cutbacks are seen by customers as a sign of weakness… a lack of confidence that is destructive to the brand, and the company, in the long run.

Taking this advice to heart, and then some is car maker Hyundai  pouncing on cutbacks in advertising by other car makers to pick up some plumb sponsorships. Think the Oscars and SuperBowl. Another company spending on marketing despite the economic emergency — AirTran Airways, a Florida-based discount airline that’s put millions into a combination TV and digital media campaign, despite the qualms of the financial guys.

As for the rest of us, the 2005 work recognizes that many businesses have other ways of spreading the word about a product or service — use these and make strategic cuts in marketing expenses where you can. Online marketing can be used to promote your product or services in a less expensive, but more targeted way. The sales staff or business development teams you have in place now are another means to get the word out. The good news is that reductions in marketing spending for the year won’t hurt your brand as much, so long as you keep up everything else.

Armed with his look at the nearly 30 year old studies, Shea recommends that business owners need to plan marketing appropriately during these tough times

Business owners can find some intriguing and useful insights on recession-era marketing at Advertising Age. A piece in Business Week explores the drop in spending by some big names, and the opportunity that other businesses are making for themselves. 

Just as with your personal budget, you’ll want to be smart about how you spend your business marketing dollars during these times. While it’s true that customers may not be buying (or calling) as much… they’re still listening and looking. Marketing campaigns, even scaled back ones, do come with some pretty impressive, though intangible, benefits, especially as others are cutting back. They leave customers, and potential ones, with a positive image of your company and keep your business top of mind when the time to buy does arrive.

Now, as always, you shouldn’t launch any marketing campaign until you’ve set some solid, measurable goals. What exactly do you want to achieve? How will you measure the results? If you can’t reach your goal with the money you have… scrap the campaign and focus on something else… something that you can achieve and measure.

Also… a word of caution about social media’s ability to fill the marketing void. Sure these services are free, but remember that the time you (or employees) spend on tweeting and such does have a cost. Like marketing campaigns, to be effective social media has to have an established plan, guidelines on content, a coordinated, professional presentation as well as measurable results. 

In the end, during good times or bad, every business needs to fight to hold on to current customers and win new ones. Marketing is only one part of that. Be creative with your pricing, keep improving your product or service, go the extra mile, resolve customer service issues quickly and with a smile, work harder than your competitors. Plan your marketing with care and asses the results of any campaign carefully.

Susan Morgan on sabtwitterSusan Morgan on sabfacebook
Susan Morgan
Creative, passionate and detailed, Susan brings 25-plus years professional writing experience to a variety of projects — get-noticed direct mail pieces, full line print catalogs, eye-catching color brochures and totally original. search engine friendly company blogs, web pages and online articles.

A lifelong love of storytelling has also produced a full-length novel (Out of the Ordinary published by booklocker in 2007). Susan continues to indulge her passion for fiction with a growing number of short stories (one an award winner in 2004, another in 2008) and finalizing a second novel.

In her spare time Susan enjoys gardening, studying astrology and tarot, being with family and friends and keeping up with politics and current events.


{ 1 comment… read it below or add one }

Kevin Keenmon July 11, 2009 at 1:58 pm

Marketing during a recession is certainly necessary. People are already going to be more cautious about how they spend their money, and if there is no effective communication for the benefits they are receiving, they may stop purchasing from a particular brand altogether. One topic I read, and blogged, about recently is the fact that a recession has less impact on the elderly. Depending on the product or service, this may be a demographic worth going after at this time.

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