Advertising in a bad economy can be a good idea. But it’s not the time to be spending and hoping. In financially critical periods, you need to focus ad spending on things you know will deliver. Performance advertising is one of your best bets.
During uncertain times, controlling costs comes first. But dialing your marketing spend all the way to zero can be a short-term fix that has negative long-term consequences. Companies that are able to maintain some marketing during a downturn outperform those that don’t as consumer spending returns to normal. In fact, companies that continue to spend through a recession had overall sales 2.5x the average of companies that stopped spending.
Maintaining ad spending during a downturn leads to increased sales and market share not just during the recession, but for years afterward. There are a number of explanations, but one of the most compelling is that because overall ad spending decreases, the competitive “noise level” goes down which makes it easier to connect with consumers. Brands that are able to spend through a down cycle are also more likely to be perceived as leaders.
This is a critical time for your customers to hear from you. They need to know how you’re adapting to serve them. Turbulent periods change behaviors and create opportunities for nimble operators. The golden rule is to focus on your customers, keep their interests at the top of your list, and be responsive to new needs and behaviors.
Here are some recommendations for marketing your business through the COVID-19 outbreak and staying well-positioned for a speedy recovery when things return to normal.
- Marketing automation and email are the lowest-cost, easiest, and most effective ways of keeping in touch with your customers. Personalized messages that are relevant and timely can go a long way right now. We are seeing open rates increase by as much as 2x. This is NOT the time to be burying people’s inboxes with spam-y come-ons. But it is a time to show you understand your customers, care about them, and are working to serve them.
- Get more social by engaging in conversations with your customers. Meet them where they are mostly likely to look for you: on your Facebook, Instagram, and Twitter pages. Make sure information there is up-to-the-minute.
- Maintain your advertising budget to the extent possible. As competitors cut back on spending, your share of voice increases and your message becomes more visible. Consumers are also more likely to perceive brands who advertise during downturns as leaders who are more stable, and more top-of-mind.
- Focus marketing spend on performance. Most advertisers wisely reduce spend on broad awareness campaigns during downturns and concentrate on programs and channels with measurable performance results. As most advertisers reduce spending, there are deals to be had.
- Experiment and measure results to get the most from every dollar you spend.
Economic downturns have long-lasting effects. It’s a time when market share rankings get re-shuffled. Nimble upstarts achieve new prominence while category leaders find themselves struggling to catch up. And share gains and losses tend to stick around for the long term. A Bain study from 2008 showed that 20% of companies in the top quartile of a category moved to the bottom, while 20% at the bottom moved to the top.
Times like these, as difficult as they are, reveal leaders and reward those who make bold decisions and serve their customers.