Updated: May 21
As COVID-19 restrictions begin to lift across the country, businesses are starting to see the light at the end of the tunnel. Never before has digital marketing been more important for attracting new business.
As the adage goes, “When times are good you should advertise. When times are bad, you must advertise.” And never has this rung truer.
During an economic downturn, there are several reasons why businesses should continue to advertise:
1. The space in which businesses are playing and advertising have likely never been so quiet. With significantly less noise and less competitor activity, companies that are willing to make the most of this opportunity will probably have a louder and stronger share of voice.
2. Businesses that continue to advertise appear strong and stable to prospects considering them.
3. Advertising is cheaper than it usually would be due to less saturation. Social Media Today reported that social media usage during the pandemic has been at an all-time high, with more advertisers pausing or decreasing their ad spend. If the audience is getting bigger, isn’t now the time to get louder?
Here are some examples of brands that doubled down on their marketing during periods of economic downturn:
In 1920, the category leader for dry cereal was Post. When the Great Depression hit, Post pulled their advertising budget and the lesser-known competitor Kellogg’s doubled theirs. During this period, Kellogg’s introduced ‘Rice Krispies’ with ‘Snap, Crackle and Pop’ and their profits grew by 30%. Do you have any Post cereal in your pantry today?
During the Great Recession, LEGO experienced a 63% increase in growth of sales. Now, when you consider the struggles that many families grapple with during a tough economic time, is buying plastic building blocks high on the priority list? No. So why did they proliferate? Simply, as a result of increased marketing and concentrated efforts in building business and sales across Asia and Europe.
During the 1990-91 recession, McDonald’s decided to decrease their advertising budget. As a flow-on, their annual revenue decreased by 28%.
Pizza Hut embraced the fact that McDonald’s were silent with an increase in their marketing spend, and during that period, their sales increased by 61%.
In 2009, during the Great Recession, Amazon was one of the few companies that thrived. Their sales grew by 28% as they continued to innovate with new products. Most notable was the Kindle, which on Christmas Day in 2009 was able to gross more sales in eBooks than printed books.
Amazon pivoted their business to be able to market a cost-effective solution to a cash-strapped economy, and it worked.
Our current circumstance presents an opportunity for businesses to thrive – not only the more obvious companies whose services are categorised as essential, but also for those in a period of downturn.
In what currently seems to be a considerably quiet market space, marketing and advertising is the only way your voice will be heard. Shouldn’t you be screaming to your customers about how you can help? Isn’t it time to raise your voice?