In times of economic downturn, businesses are often tempted to cut down on spending by drastically reducing their advertising. In cutting back on advertising, however, businesses not only put their short and medium-term growth at risk, according to a McGraw-Hill Research study, but also overlook the opportunities that advertising during an economic downturn presents. These opportunities include:

Filling a now-empty space

Forbes suggests that one of the advantages of advertising during a recession is that maintaining a market presence becomes less expensive, as there are fewer businesses running ads and driving up prices through competition.

Remaining consistent-in-frequency

Harvard Business Review states that consistency-in-frequency is more important than consistency-in-medium or consistency-in-size. That is, rather than reducing costs by putting out fewer adds, it is better for businesses to shift to shorter adverts, or move from more expensive mediums like television to more accessible mediums like radio.

Creating stability that builds loyalty

During times of crisis, the primary focus for businesses should be retaining current consumers. Continued advertising with customer-focused messaging is a powerful way to demonstrate that a business is stable and secure; this image increases customer loyalty to, and trust in, a business.

Targeting changing priorities

Harvard Business Review, in analysing the GFC, outlined four psychology-driven consumer categories, and four consumer-created categories of goods and services, which can guide the adaptation of messaging to maximise advertising effects. For example, if a business knows that consumers see their product as a treat, rather than essential, then messages that target consumers in the live-for-today consumer category (who are more likely to spend money on treats) will be most effective.

Businesses that use the opportunities the downturn presents to solidify their market presence recover more quickly than businesses that leave advertising at the wayside. Hyundai’s response to the GFC exemplifies this. By running eye-catching ads during the Super Bowl and the Academy Awards in 2008, filling in promotional opportunities that other automobile companies backed away from, and honing in on reassuring, customer-focused messaging, Hyundai pulled ahead of its competitors:

·       Hyundai increased its market share from 3.1% to 4.3% in 2009.

·       Hyundai increased its sales by 5%, while their competitor’s sales dropped by 22%.

·       Hyundai was voted “Top Marketer of the Year” by Automotive News.

Hyundai grew their business during a time in which doing so seemed almost impossible. Hopefully we can all learn from their example, and I’d encourage you to use the opportunity presented to us now to fill in gaps left by absent competitors, explore alternative advertising tactics, establish brand loyalty, and better understand consumer drivers. Spending money advertising during these times may be challenging but we would do well to remember the advice of Henry Ford: “Stopping advertising to save money is like stopping your watch to save time.”

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This article was originally posted on Linkedin by 98five Media Marketing Manager Connor Allbury

Connor Allbury has spent the last decade helping businesses connect with 98five’s audience. To find out how you can partner with 98five to promote your business and reach our loyal audience contact Connor on 9313 0800 or email [email protected]