COVID-19: Why You Should Keep Advertising During a Market Downturn
Los Alamitos, CA (April 15, 2020) – Businesses nation-wide are taking a hard hit due to the COVID-19 pandemic, and the print media industry is no exception. Often times during an economic crisis, businesses may end up cutting marketing expenditure in an effort to save money. However, history tells us that cutting advertising budgets during a downturn can actually hurt your business long-term as opposed to helping it. Forbes gives us a list of several different brands who benefitted by maintaining their marketing budget during an economic downturn. Here are their stories.
Kellogg’s Cereal Brand: In the 1920s, Post Foods Cereal brand was the category leader for ready-to-eat cereal. During the Great Depression, Post cut back on their advertising budget while Kellogg’s Cereal Brand doubled their advertising spend, investing in radio and introducing a new cereal called Rice Krispies, featuring “Snap, Crackle, and Pop.” Kellogg’s profits grew by 30% resulting in the company becoming the category leader, a position it has maintained to this day.
Toyota Corolla: The 17-month recession of 1973-1975 was triggered by the energy crisis. In late 1973, the U.S. government issued its first miles-per-gallon report in which Toyota Corolla was second to Honda Civic in fuel efficiency. Since Toyota was experiencing strong sales, when the economic downturn hit, the temptation was to drop their ad budget, which they resisted. By adhering to its long-term strategy, Toyota surpassed Volkswagen as a top imported carmaker in the U.S. by 1976.
Taco Bell and Pizza Hut: In the 1990-1991 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%.
Amazon: Amazon sales grew by 28% in 2009 during the “great recession.” The tech company continued to innovate with new products during the slumping economy, most notably with new Kindle products which helped to grow market share. As a result, in the minds of consumers, Amazon became an innovative company by introducing a lower cost alternative to cash-strapped consumers.
While the temptation now may be to cut back on advertising, you may want to reconsider. Instead, redirect your brands’ message to match the current economic climate but be careful with the type of message you put out there, especially during these fragile times. COVID-19 has impacted many individuals on a personal level, and you don’t want to risk coming off as insensitive or exploitative. Whatever your message may be, it’s best to keep a positive, inspirational and helpful tone.
As history shows us once again, businesses will recuperate and people will buy again.
Sources: Forbes – When A Recession Comes, Don’t Stop Advertising, By Brad Adgate; Trend Offset Printing