Due to tough economic times, a company’s first inclination may be to pull back on expenses and trim the marketing budget. According to a new study, cutting spending hurts brands in the long term. The study shows brands who cut their marketing spend during a downturn lost marketshare and typically never recovered to private labels. The brands that did not vary their ad spend tended to show an increase in marketshare and stock price. Instead of decreasing their overall ad spend, a company should consider maintaining or increasing their marketing spending. Companies should look at this as a time to strengthen their competitive advantage. Boosting your spend while your competitors are cutting back, can improve your marketshare and increase your return on investment at a lower cost. If you have to cut your spend then try to maintain the same advertising frequency but in fewer or less expensive mediums. Maybe consider switching to radio ads instead of TV or utilize online advertising or social media instead of direct mail. Whatever decision your company makes, always stay consistent and true to your message and brand. In times like these, consumers find comfort in the familiar.
- Krista Robertson, President-elect CAMA
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April 7, 2009
That is so true. I hope people become aware of the dangers of sudden marketing budget cuts and find creative solutions.
Thanks!
April 22, 2010
I always enjoy reading intelligent articles by an author who is obviously up to snuff on their chosen subject. I’ll be watching this post with great interest. Keep up the good work, till next time
May 7, 2010
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