Recession? What recession?

Recently, my pal @MarketerBlog drew my attention to this post which suggested that brands that INCREASE their marketing/ad spending during a recession stand to gain a SUBSTANTIAL competitive advantage.

Skeptical? Of course you are. Still—take a moment to consider these tasty data points (from Innovating through a Recession by Professor Andrew J. Razeghi at the Kellogg School of Management at Northwestern University):

  • Increasing advertising spending during economic expansion often yields no improvement in market share, because 80% of your competitors are also increasing their spending.
  • Businesses that maintained or increased their advertising spend during recession averaged higher sales growth during the following three years
  • Within four years, the businesses that maintained or increased their advertising spend during that recession experienced a 256% growth in sales over those that had cut back on advertising
  • A decade later, aggressive recession advertisers increased market share 2½ times the average for all businesses during the post-recession

Surprised? You shouldn’t be. It’s your basic, “Buy Low, Sell High!” strategy. Nothing new here. The problem aint that we don’t know better… it’s that we’re too busy behaving like lemmings to do what we know is right.

Hell, even the guys at The Economist are preaching a “spend more on advertising” strategy. Granted, they might just be hurting for sales… Still, they make some pretty compelling points in this well-designed, cleverly-executed pitch (worth a read, I promise):

My take-away message? Getting through this ‘recession thang’ is a bit like driving through a blizzard. When you hit a patch of ice, instinctively, you want to turn your wheels AWAY from the direction of the skid. DON’T. Even though your knuckles are turning white and every cell in your body is screaming “TURN AWAY!!!!! AWAYYYYYYY, YOU IDIOT!!!!!!!!!!!!”

Turn IN to the skid—or kiss your sweet, scared ass goodbye.

8 Responses

  1. Thanks for the mention of my post. You are dead right about this being a counterintuitive decision to crank up the marketing during a recession. But it has been the proven formula for success time and time again. I’m doing it in my business.

  2. What do you do about marketing that falls flat on it’s face?

    Earlier this year, my company invested in several different advertising projects (direct mail, targeted advertisements with calls to action at local events, etc) that all yielded ZERO results. While I’m sure we could have build better ads, I’m convinced that part of the problem was the recession. People aren’t buying…and some ads don’t work.

  3. Marta – all good points (this and the holy grail post also). I’d reiterate to my fellow marketeers — your marketing efforts (social or otherwise) need to contain value, in and of themselves. “Look at me, I’m interesting!” kind of marketing no longer cuts it. Consumers, or potential consumers, respond to that which provides them with some sort of value – if that’s in helping them solve a problem, entertaining them, or just engaging them in a meaningful conversation. To be successful, the marketing message, not just the product or service being marketed, needs to have some value.

  4. @KatMeyer – I couldn’t agree more. It’s ALL about value.

    @MarkTruman – “What do you do about marketing that falls flat on it’s face?” FIX IT. Fix the product. Fix your customer service. Fix your marketing. Easy to blame the economy. Harder to create real value.

  5. Looking for marketing messages that create economic value companies should try to
    become part of the community, use peer relations to raise loyalty and stickiness and avoide an exploitation-only approach.

  6. @mzkagain – No doubt it’s easier to blame the economy, but aren’t some methods going to get lesser results?

    Take a free event, for example. I think our clients are more interested in free events than they used to be and less interested in anything that might cost them money. Any marketing pitch that addresses stretching dollars is going to be more effective.

    I’m not saying we get off the hook for getting zero results. Just the opposite. I’m saying that some things are doomed to fail in a recession and we should be looking for different marketing opportunities.

    I’m hearing the same thing from every Marketing blog I’m subscribed to. Spend more! Do more! But shouldn’t we be doing more in a way that matches the market?

  7. @Mark Truman – absolutely! Regardless of the environment, never forget the basic rule: ALWAYS BE IMPROVING. My point was more to point out that shrinking away in fear and viewing marketing as the problem rather than a part of the solution [during a recession] is naive.

    Best of luck to you.

  8. […] on ice and marketing in a recession are similar activities – so implies Bonafide Marketing Genius Marta Kagan who says “Turn IN to the skid—or kiss your sweet, scared ass […]

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