Advertising during a Recession
Just about every company is implementing cost-cutting measures to deal with the current recession. In many cases, companies are significantly cutting their advertising budget. A number of recent studies have come out that would suggest this is a significant mistake. Indeed, a recent research study by McGraw-Hill of 600 businesses found businesses that maintained or increased their ad spend saw higher sales growth during a recession and in the years following. The study found those who maintained or increased their ad budgets experienced a 256% increase in sales compared to those who cut their budgets.
Armed with this information, the prudent course would suggest a company maintain or increase its advertising budget during the current recession. Agree? Actually, this is a trick question. It’s similar to saying “practice makes perfect.” However, that’s simply not true. Only perfect practice makes perfect. This is also true of advertising. A significant amount of money can be easily wasted by advertising in the wrong media. For example, the phonebook is infrequently used to find business services. The go to source today has become Internet search engines. I doubt few would argue with this. Many of us use a search engine, like Google, every day. In my own case, which I believe is representative, I rarely use the phonebook to find goods and services. Today, Google is even used to find phone numbers. In effect, it has replaced the phonebook. Therefore, advertising in the phonebook would likely yield a poor return on investment.
Getting results in today’s economy
As the president of an Internet marketing company, it would be self-serving for me to suggest that search engine marketing is where a company should spend its advertising dollars. Not only would that be self-serving, but in my opinion it would be a half truth. Getting results in today’s recession economy requires a new approach. I believe the new mantra should be promotion during a recession, not simply advertising.
Obviously search engine advertising has its place and deserves serious consideration when developing your marketing communication plan. However, there are numerous other marketing, public relations and sales thrusts that deserve equal consideration.
Here are some to consider:
Search Engine Optimized Website
Every company, from a one-person consultancy to a Fortune 500 enterprise, needs a search engine optimized Website equal to or better than the competition they face in the marketplace. Let’s face reality. The go-to source for information has become Internet search engines. Having a competitive Website is simply not enough. Statistics show that approximately 90% of all Websites are found as the result of a search. Therefore, if your Website is not found in the search engines, and more specifically within the first two pages of search returns, your Website is virtually invisible. 65% of searches stop on the first page of search returns. Only 35% proceed to the second page. Seldom does anyone go further. Therefore, the first step in the new mantra of promotion is to have a search engine optimized Website equal to or better than the competition.
- Read more about search engine optimized web design. (http://www.iblogmarketing.com/2009/06/01/website-design-critical-to-business-success-online-and-off-line/)
Optimized Press Releases
Companies want to work with companies that are busy. They probably don’t teach that in the Harvard business school, but it’s a fact of life. One great way to demonstrate that the company is both busy and in the forefront of its industry is through the use of search engine optimized press releases. When done properly, the search engine optimized press release will rank highly in key news portals, such as Google News and Yahoo! News. Over 70% of journalists use news portals to keep abreast of the news in the industries they cover. In addition, search optimized press releases are picked up by numerous Websites throughout the Internet. This is also a great way to build link popularity (i.e. external links pointing to your Website), which in turn will help your Website rank highly in the search engines.
E-Mail Marketing
E-mail is making a comeback and provides an excellent way to generate leads, increase sales, and keep your company top of mind. I covered this in a recent blog post, E-mail Marketing Soars in Recession.
- Read more about e-mail marketing. (http://www.iblogmarketing.com/2009/05/26/email-marketing-soars-in-recession)
Social Media Marketing
Lastly, consider launching a social media marketing campaign. Social media sites like Facebook, networking sites like LinkedIn, and micro-blogs like Twitter are proving to be highly effective marketing and communication channels. Our agency, TMA E-Marketing, has been helping a wide spectrum of clients, ranging from Fortune 500 enterprises to startups, develop effective social media marketing campaigns tailored to their specific objectives.
- Read more about social media marketing. (http://www.iblogmarketing.com/2009/04/20/social-media-marketing-critical-to-business-success-part-i/)
As an Internet marketing, advertising and public relations agency, we strongly believe in the value of advertising. However, don’t be fooled by statistics that simply hail the merits of advertising in a recession. We believe that the advertising must be strategically targeted to reach the right audience. We also believe in a balanced approach, including the elements discussed above. Don’t simply develop an advertising plan. Develop an integrated marketing communication plan that cost-effectively promotes your company to your target market.
Recession in a way teaches us to be more mature and wise in spending, I hope that what we learn from here should continue as practice for our daily living as well as into our business.
We’ve come up with very high researching to be efficient in our business, we manage to use all available resources in the internet that has been valuable for every internet marketer.
Recession as they say is a cycle “it comes around then goes around” Personally as a Internet Marketer the recession has not effected Advertising as with Adwords etc the prices have not really been affected
During the recession email marketing is one of the most cost effective forms of advertising. You can reach more people on a smaller budget.
Very relevant article! I guess a recession is a lesson and we should be prepared and plan ahead to survive it as best we can. Great tips by the way!
Cheers.
In the recession companies tend to make advertising the least of their priorities as they think it will cost them too much money. In the recession advertising is key to retaining customers. Companies just need to find new and cheaper forms of marketing their products and services.
Yes it’s true! Recession has made people more mature and wise about money.Now we think twice before spending even a penny on something.Advertising is very important part of business so this is a great post on saving money on advertising.
When there is a recession, it is important to look at all aspects of your business strategy. Advertising and promotion is always important but perhaps you need to look more cost effective ways to get more your advertising and promotions dollar. Search Engine Optimisation is always important regardless of whether we are in a rising or falling market and there should be a focus on public relations activities. Where money could be better spent may be in print, radio or television advertising.
Great post. I agree that in a recession it is important to continue advertising, but to find more inexpensive and more effective ways to do so. I work for a small advertising agency which utilizes internet marketing to the fullest. http://www.mediarevo.com/services/seo . Not only is more cost effective for the client but it produces the results that are needed, especially during times like these. SEM/SEO reaches a larger audience and is available literally at their fingertips.
Recession will really kill your company if you don’t know ow to keep it alive. and advertising is one of the ways it could be put in to air again.
Thanks for the post, I look forward to reading about your findings. We still use GA but have regularly visited Get Clicky and considered going with the realtime option. I think its high time we take another look, thanks again
The recession was always going to happen, those that hurt the most were those who were not seeing the warning signs. Regardless, people will purchase, and purchasing helps solve the recession, so advertise your butts off, they will come.
A well thought out online marketing strategy is always important, even more so during a recession. Enjoyed the article!
the problem with cutting cots during a recession is that when the inevitable recover comes, your business will be worst placed to take advantage of the explosion in new bsuiness. Sure in times of recession it’s instictive to tighten your belts, my advice is to resist the temptation to cut your marketing busget and instead spend more on marketing, but only on the channels you can track and gain ROI such as online marketing.
when costs are cut for advertising, it usually means the return is lower. But there are avenues to look at.
If you run analytics on all your advertising campaigns and mediums and discover where you make the most profit (ie greater ROI), then that is where to put most of yur available funds….