If you’ve been in the voiceover business for any length of time, at any level, you all ready know that one of the keys to doing well is marketing your services. So what kinds of marketing choices are you making right now with the economy running at less than top speed?
My friend Blaine Parker publishes an email newsletter every Monday. Today’s edition quoted extensively from Marketing Consultant David McBride and a newsletter he’s recently sent to his clients. I’ve been given permission by both Blaine and David to republish this information here.
HOT POINTS for the Week of June 9, 2008
OK, THE ECONOMY STINKS—HOW ABOUT YOUR MARKETING?
Some months back, you may recall a discussion of advertising in a recession. The evidence shows that businesses who advertise in a downturn end up being winners. The businesses who circle the wagons and stop advertising are the big losers. In that discussion, there was some evidence provided.
However…
Through the efforts of Marketing Consultant David McBride, we have a new truckload of documentation. These facts will make stout-hearted advertisers quake in their boots, will send women and children fleeing for the exits, and—best of all—will make savvy marketing folk rub their hands in glee. Much of the following information is excerpted, with permission, from Mr. McBride’s own column to his clients.
A hearty thanks to Mr. McBride for allowing the use of these golden arrows. He has proffered bold bullet points to help keep smart businesses at the table.
HISTORICAL FACTS
These tidbits solidify the notion to advertisers that we aren’t making up a load of self-serving tripe. Since 1854, there have been 29 recessions, on average one every 4-5 years. During each recession over the past 50 years, consumer spending went up, not down. During the above mentioned 50 year period there have been nine periods of economic recession ranging from seven months to sixteen months – an average of eleven months per recession.
A sales comparison study conducted among 200 companies in 1923 (some cut advertising and some increased it) revealed that those that had the largest sales increases were those that advertised the most. So, we have plenty of recessions from which to draw examples.
We also have plenty of recessions to prove that smart businesses survive the downturn.
WHAT’S IN YOUR CEREAL BOWL?
As a consumer packaged good, there is little more reliant on marketing than breakfast cereal. Walk through the cereal aisle and look at the ingredients listed on the box. You will find precious little difference between the products. It’s all packaging and marketing.
One famous story of recession advertising involves Kellogg’s and Post cereal companies in the 1920’s. Both were vying for the position of #1 in the breakfast cereal business. When the Great Depression hit, Kellogg’s kept advertising steadily while Post scaled back. When the depression ended, so did the struggle for number one. Kellogg’s emerged dominant; and remains there today.
LIKE GLADYS KNIGHT SAYS, KEEP ON KEEPIN’ ON
A study initiated in 1947 follows the performance of companies through successive recessions in 1949, 1954, 1958 and 1961. The study compares their annual advertising spending with sales trends and profits before and after the recessions. The results?
Companies that cut back experienced a decrease in sales and profits. But wait—there’s more. And worse. Those same companies continued to fall behind the companies that maintained ad spending levels.
Ouch.
Similar studies done in 1970 and 1974-75 reached similar conclusions. Companies who cut back their advertising lose, plan and simple.
HERE NOW, THE “COMMON EXPERIENCE OF COMPANIES THAT CONTINUED ADVERTISING”
That quote comes from Vice President for Research at McGraw-Hill, Dr. David Forsyth. It’s also reflects the common experience every business wants to enjoy. In 1974-1975, companies who continued advertising experienced sales growth 15% higher than those who cut advertising. By 1978, companies that continued advertising had sales of 132 percent above 1973 sales levels.
Other figures from the same study analyzed 600 U.S. companies between 1980 and 1985. Firms that “maintained or increased their advertising expenditures” during the 1981-1982 recession averaged “significantly higher sales growth” both during the recession and for the three years following. And in 1985, sales of “aggressive recession advertisers ” were 256% higher than those companies which “did not keep up their advertising.”
For anyone not interested in doing the math, that’s almost double the 132% advantage in 1978.
Hmm. Spending money means making money. How ‘bout dat?
PULL THE PLUG ON YOUR ADVERTISING, AND YOU MIGHT AS WELL BE PULLING THE PLUG ON THE DRAIN
And the subsequent sound is that unseemly sucking as business circles the bowl on the way to the bottom. Mr. McBride points out that…
Economic downturns, recessions, depressions, whatever the case, the experts agree: this is no time to pull the plug or even scale back advertising. Those companies that become more aggressive have the opportunity to bury their competition [emphasis added] and build momentum. You may have heard this before, “A rising tide lifts all ships”. Hear that, ALL ships! And in a robust economy, that’s fine, but you now have the opportunity to be the lone ship rising in your category.
That’s a good one. “Be the lone ship in your category.†How many advertisers ever think about that possibility? As Mr. McBride warns…
“DON’T LOSE THIS OPPORTUNITYâ€
After we pull out of this one, we probably won’t have another chance like this for several years to come.†It’s like capitalizing on any boom. Or, in the case, capitalizing on an implosion. Recognize it early, then do the smart thing. And history has proven, time and again, the smart thing is aggressive, ramped up marketing in a media market where the competition is cowering in fear and has left the building.
THERE ARE PLENTY OF WAYS TO CUT COSTS DURING A RECESSION
Advertising is not one of them.
Better bookkeeping, smarter spending, cutting waste, negotiating terms with vendors and lenders—Mr. McBride notes that all of these are places where costs can be controlled. And frankly, even in the best of times, these are places where costs should be managed well.
But advertising? Cutting that is the same thing as firing your best salesmen. And exactly how does that help you sell anything? Full speed ahead and enjoy the ammunition.
As always,
Blaine Parker
Your Short, Fat Creative Director in
Los Angeles
www.shortfatadvertising.com
I hope you can see the connection with your voiceover business, or for that matter your any kind of business. If you decide to cut back on your marketing and advertising now, because you’re feeling the pinch of the economic slowdown … you’ll continue to feel that pinch long after the economy recovers.
Again, my thanks to Blaine Parker and David McBride for this excellent material and for permission to use it.