In a recession, companies typically make their first spending cuts on advertising, though this is a big mistake. Advertising during a recession could be one of the most critical things you do for your business, both now and in the future.
A research conducted by McGraw Hill shows evidence that in a study of the U.S. recession from 1980-1985, out of the 600 businesses analyzed, the companies that continued to advertise hit a 256% growth by 1985 over their competitors that eliminated or decreased spending.
The numbers are there and prove that there is a reward for businesses that continue to make aggressive efforts in advertising efforts during an economic downfall. Need more convincing? Below are more reasons why you should continue advertising during difficult economic times.
Competitors won’t advertise
Small businesses usually have a limited budget for advertising. During a recession, many of these smaller businesses will hold back on advertising in order to save on expenses, but all that really does is open the marketplace to all of those companies’ competitors. The presence that the smaller businesses have spent ad dollars on to build brand awareness and target their audience is now an open playing field for the competitors that are willing to spend on advertising.
For example, if you own an auto body shop, regardless of the recession, people are still going to need those essentials, by advertising when all other companies are cutting down, you have the opportunity to gain new business.
You can tailor your message and make more sales
When the economy is booming, people aren’t as discerning with their spending. While this is believed to be a good thing, it could potentially take away advertising space for smaller businesses, where money isn’t a concern for large corporations that will pay for premium advertising spaces and blast it to every target audience imaginable.
During an economic downfall, large corporations will typically reduce spending, which is why smaller businesses need to take advantage of this time. This will give you a chance to advertise a tailored message to consumers you wouldn’t have reached before. Specifically, tailor your message to the cost a consumer could be saving with you because what is the consumer’s main concern at this moment? Saving money. Now, they’ve gotten a quality item for less, and you’ve gained a new customer base that won’t return to competition.
Create a long-term position for your business
Standing out in the marketplace is hard as is when you and your competitors are battling it out in the advertising world. As your competitors cut back on ad spending, your advertisements can cut through the clutter and create more brand awareness. While consumers may not be spending as much as usual, they’re still spending. Be the company they think of when they do spend and watch your sales increase.