Australia has officially been declared in recession for the first time in nearly 30 as it suffers the effects from coronavirus and the bushfires early this year. During economic decline it is common for businesses, fearful of declining revenue, to begin cutting costs in various areas including their ad spend. But is this really the best thing you can do for your company or is it possibly the beginning of a massive decline in business and market share?
There have been numerous studies dating back centuries that point towards the advantages of maintaining or even increasing advertising during a weaker economy. Proving brands that invested in advertising during an economic downturn, increased their market share and overall sales during and after the downturn.
There are several reasons brands should keep advertising during a recession:
- With competitors reducing their ad spend, the 'noise level' in a product categories is reduced opening up opportunity to take market share through re-positioning or introducing new products
- Brands can portray the image of being stable during challenging times in the eyes of consumers
- The cost of advertising drops during a recession. The lower rates create a buyer's market for brands
- When marketers stop or reduce advertising, they lose 'share of mind' with consumers which can result in a loss of market share and sales. Massive opportunity for brands to win 'share of mind' over their competitors
Brands that maintain or even grow their share of voice become more profitable when the recession ends. Brands that go dark during a recession, risk having to spend all they have saved, plus some- in a desperate attempt to claw back market share, when economic growth returns.
There’s an opening right now to take aggressive share from your competitors and truly dominate your industry for decades to come.
While brands out there are cutting their marketing budgets by 50% or more…the smart brands and marketers will be working on sowing their message into the minds of future customers. Developing long-term strategic plans and investing now so they can dominate their market place in the future.
If you've been waiting for an opportunity to push your competitors out, now is the time to invest. Continue to do this and your brand will rap the largest harvest in its history.