By Chris Bishouty, COO
All around the world, phones at advertising agencies are ringing off the hook. The message from clients? We need to cut advertising spending NOW. While your first instinct may be to slash your budget and be conservative until this Coronavirus pandemic is over, research says that decision could do harm to your business in the long run.
There are more people consuming content now across the nation than at any other time in recent history. While we haven’t had a widespread pandemic, Nielsen has measured data in smaller, more regional emergency situations.
This graph of Total Television Consumption in Houston, TX shows a 56% increase in viewership during the Hurricane Harvey disaster as compared with normal viewership. The same consumption is happening now across the country. A Harvard Business Review study found that advertisers who continue to spend on marketing during recessions had a 37% chance of growing sales and were 75% more likely to outperform competitors who cut ad budgets during that time. (https://hbr.org/2010/03/roaring-out-of-recession)
By reducing your ad budget you are not only missing out on reaching your current clientele base and a larger set of your desired customers, but you are also leaving your market share up for grabs from competitors. Considering that acquiring a new customer costs 5 times as much as selling to an existing one; the cost of losing market share by pulling back your advertising campaign during a known short-term crisis, will likely be more than what you save.
However, it is important to note that the decision to cut or increase advertising spending depends on who you are in the market. A recent study by media research firm, Kantar, suggests that brand health may become vulnerable when brands stop advertising on TV. They also state that larger brands are more likely to suffer a decline than smaller brands. The information from Kantar highlights the biggest problem with cutting ad spend is that shutting down your marketing in today’s economy is shutting down your communication, and more importantly your relationship, with the consumer.
Now that we have presented the case, let’s talk about what you SHOULD do in the current climate. First, ask yourself, “how can I better engage my consumer?”
Here are our top three tips for those looking to move forward with advertising NOW.
- Define Your Goal: Decide how you want to engage the consumer in the near term. Keep in mind it is not necessarily about sales or establishing traditional brand equity. Your goals need to be focused around brand continuity and engaging your consumer through empathetic or uplifting messaging. Keep the conversation going in a respectful way.
- Reevaluate Budgets: Yes, earlier I said cutting ad spend is a mistake but that also doesn’t mean spend frivolously or without purpose. Determine a clear path and intent for what you want to accomplish and decide what it’s going to cost to execute to that goal.
- Make Your Messaging Relevant: Whatever advertising campaign you were executing successfully prior to right now will likely not work, unless you have a product or service that inherently is built for what we are facing today. You have more eyeballs but most are focused on one thing. That means your message needs to be relevant, compassionate, and understanding to cut through the clutter. Proof of this is already starting to permeate the market as we see the most engaging TV ad this week, according to iSpot.tv, which comes from Hotels.com, and hits directly on topic: https://ispot.tv/a/ZULD