DPC Yellow Pages bridges SMEs to their markets
Directories Philippines Corporation (DPC), a 100 percent Filipino-owned company, is the pioneer and biggest publisher of the telephone directories in the
Philippines. The company publishes 38 directories for 10 telephone companies nationwide, which are distributed for free...
Public Can Now Get Telbru/Yellow Pages Telephone Directory
Yellow Pages updates brand for Internet age
Secret with the lot
|
Cutting Advertising During Recession
by Ken Clark - Publisher - YP Talk
One of the dangers of being stuck behind a desk day in and day out as I am is that you tend to unquestionable embrace what you see and hear on major media.
For example, if you just accept what you are hearing on the nightly TV news or the stories that appear in the fast shrinking pages of the local newspaper, the
purveyors of doom and gloom would have you believe that the world is mired in a depression which matches conditions from the 1930's. Of course, we all know
that "bad news sells" in the news media world.
Is it any surprise then that many of our advertisers are thinking about reducing or cutting their advertising all together? The Yellow Pages industry in not the
only media affected by these actions. As early as last January, an article in The New York Times noted that advertising spending dropped severely in December.
While the article was specific to newspapers, it pointed out one of the dumbest moves marketers can make in a slow economy/recession is to cut your advertising.
A Time to Step on the Accelerator, Not Back Off
How can I say that the dumbest move a marketer can make in a slow economy/recession is to cut the advertising budget? The facts are clear from numerous
studies conducted during recent recession periods. For example, McGraw-Hill Research analyzed 600 companies covering 16 different SIC industries from the 1980
through 1985 period. The results showed that B2B firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged
significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985,
sales of companies that were aggressive recession advertisers had risen 256% over those that didn't keep up their advertising.
Another study of the 1990-91 recession by Penton Research Services, Coopers & Lybrand, and Business Science International, found that better performing
businesses focused on a strong marketing program which enabled them to solidify their customer base and take business away.
Even more evidence can be found in these reports:
- MarketSense compared 101 household name brands during the recessionary period 1989-1991. Jell-O, Crisco, Hellman's, Green Giant and Doritos saw sales drop by as much as 26-64 percent. But Jiff peanut butter raised ad support, sales went up 57%; and Kraft salad dressings saw a rise of 70%. In the beer category, overall spending was down 1% while Bud Light and Coors Light, who each spent ahead of the category, saw sales increases of 15% and 16% respectfully. In fast food, McDonald's cut ad spending and volume was down about 2% compared with Pizza Hut and Taco Bell's who increased ad spending to yield a 61% and 40% gain.
- Cahners Publishing Co., together with the Cambridge-based Strategy Planning Institute, released a report in January 1982 outlining the results of an extensive study which disclosed that during recessionary periods, those businesses (who spent more) tended to gain a greater share of market. The underlying reason is that competitors, especially smaller, marginal ones, are less willing or able to defend against aggressive firms
- A jointly-sponsored ABP/Meldrum & Fewsmith study of the 1970 recession again showed that "sales and profits can be maintained and increased in recession years and in the years immediately following by those who are willing to maintain an aggressive marketing posture while others adopt the philosophy of cutting back on promotional efforts when sales appear to be harder to get."
- A follow-up 1979 study by ABP/Meldrum & Fewsmith revealed "that companies that did not cut advertising expenditures during the 1974-75 recession, experienced higher sales and net income (during those two years and the two years following) than those companies that cut in either or both recession years."
What To Do
When facing concerned advertisers both local and national whose instinctive reaction is to spend less and protect profits by making the cuts (advertising and
marketing support) here is one list of proactive tactics from "Advertising in a Recession," that could help you in discussions with concerned advertisers.
During bad times:
- Concentrate on your core values: Reinforce brand values by demonstrating strong consistency of message.
- Increase spending and share of voice: The data clearly validates the connection between increased spending and increased market share.
- Market to your constituency: Concentrate on your loyal customers and, if need be, invest in database marketing/CRM as a means of developing and maintaining the communication.
- Hang in with your ad agency: That long-standing relationship will help them provide a real understanding of the brand vision and how it should be communicated in tough times.
- Start sponsoring: Events, cross-promotions, cause marketing ... anywhere the brand message can be spread.
- Command premium price: Strong brands can do it. The consumer rationale is in how you explain the value-message of the brand.
- Introduce new products: The advantage of being "first in" with an innovation and entering a market with weakened competition may offset or outweigh the possibly longer period of start-up investment in waiting until good times return.
Conclusion
I think the comments from Saatchi & Saatchi's Kevin Roberts, writing for Advertising Age magazine best summarize it -- "Consumers don't stop buying when economies
go though down cycles. They look harder for value." Or, as another unnamed major business-to-business advertiser put it "When times are good, you should
advertise. When times are bad, you must advertise." And what better ROI can you get than an advertisement in Yellow Pages?
|
Cutting Advertising During Recession
One of the dangers of being stuck behind a desk day in and day out as I am is that you tend to unquestionable embrace what you see and hear on major media...
Annual Conference
8th and 10th, November 2009
Bali, Indonesia
See Presentations (pdf)
|
