TIME FOR A LEAP OF FAITH
As COVID-19 continues to cause disruption to business operations and budgets are reviewed and reviewed again as revenue streams adjust, taking a pause and a look back at what can be gleaned from past economic fallouts might provide valuable insight. Whilst the current situation is unprecedented learning from previous recessions could help focus current strategies.
And whilst reducing marketing spend may seem an obvious cost cutter history, it would appear, would say differently and this recession companies appear to be listening.
In 1947 US Buchen Advertising Tracked and measured annual advertising spends, sales and profits before, during and after recessions in 1949, 1954, 1958 and 1961 and found that almost without exception sales and profits dropped off at companies that cut back on advertising.
Whilst the marketing landscape has changed dramatically since then there are many examples of businesses benefiting from increased marketing spend during a recession and the sentiment is mirrored by the master himself, David Ogilvey, in his book Ogilvey in Advertising where he noted that “those who retained their ongoing advertising budgets had more than doubled their sales two years later, while sales from companies that cut their advertising budget had barely gone up 50%. Three years later, sales were down for companies that had cut their advertising while it was up for those that did not. The net income for those companies also followed the same suit over the same period of years-those companies that did not cut back their advertising had more than tripled in sales, while companies that did cut back during the recessions had barely doubled.”
More recently, in the States a recent survey by Duke University’s Fuqua School of Business showed that marketing as a percentage of a company’s revenue increased to 11.4% in May this year which is the highest level recorded in the annual survey’s history stating that ‘as consumers turned digital, so did marketers’ strategies.’
Without doubt during a recession it is time to get creative and not just with your budget. More than ever your brand voice needs to stand out and be heard, reaching, and engaging with your customers and importantly with the right messaging as those that are getting it wrong continue to be called out on social media.
It’s time for a leap of faith in more ways than one.