Know-How Exchange : Advertising/PR

You could say that the Political Campaigns of Obama and McCain are undertaking record advertising spending during this weak economy. I know they are not companies per say but rather groups and clusters of companies in the form of PAC's which they represent.

I think a lot of it depends on what you're selling and what your goals are.

For some industries, increased marketing right now should be a no-brainer...collection agencies, credit repair, credit counseling, debt negotiation, etc.

For others, especially if you are trying to make a sale right now, today...it's probably not so smart to ramp up your spending. I don't think all the advertising in the world is going to help the automobile or housing industries.

If your goal is to build a brand, however, then it could be a good time to take advantage of lower media costs and reduced noise.

Just my opinion.

There is a publication "The True Cost of cutting Adspend, The Impact on Premium Brands" published by The World Advertising Research Center (WARC) contact info@warc.com The study concluded that the brands that did well in previous recessions across 25 categories were those that increased adspend. The results of the study strongly suggest that relatively heavy and continuous advertising is a causal factor in premium brands achieving success in both the short and long term, even in a commercially difficult environment. The other dynamic in tough times is that if you decrease your advertising you offer a competitor an opportunity to move up the market share ladder at your expense

Koen,
I believe these companies generally do so based on management commitment rather than some argument.

I know of a couple of companies who may be what you are looking for. Contact me via my profile and we can chat a bit about them.

Here are some additional specifics:
https://www.nytimes.com/2008/07/09/business/media/09adco.html
https://www.boston.com/news/politics/politicalintelligence/2008/07/ad_spend...
https://www.fipp.com/Default.aspx?PageIndex=2002&ItemId=14211
https://www.outsellinc.com/store/products/741
https://paul.kedrosky.com/archives/2008/01/02/accelerating_on.html
https://www.foliomag.com/2008/national-magazine-ad-spending-slips-1-3-perce...
https://latimesblogs.latimes.com/technology/2008/07/spending-on-onl.html
https://www.multichannel.com/article/CA6580091.html

The company I work for has continued to market, advertise and launch new products despite the economic landscape today. We're lucky in that our CEO trusts our expertise. Here's another reference (with charts)

https://www.wirelessdesignmag.com/ShowPR.aspx?PUBCODE=055&ACCT=0000100&ISSU...

Our company, although we've slowed down some, hasn't been as affected as others because we are showing that we're not only still here, we are innovative and expanding in new directions, not standing still or collapsing. This in turn will make us the one to be the obvious choice for partnership with new distributors, private label, etc. as times improve.

How do we pull it off? We showcase why we are better, even though we aren't the least expensive choice. We are also lucky in that the products that are the foundation of our company are made in the U.S. and green, so we're playing that up as well. Figure out how you can STILL fill a need/solve a problem/improve the business...whatever it is your company does and tell that story. Again and again. Then tell it one more time.

Think of new ways that cost less maybe...do you send e-newsletters to you customer base? That is one way to keep you in front of them. Much more reach for less dollars. Co-op if you can. But keep your name out there.

Feel free to contact me if needed.

There was an article about Colgate Palmolive increased ad spending and increased revenue in Brandweek 30/7. The web address is:
https://www.brandweek.com/bw/content_display/news-and-features/packaged-goo...

Regarding Question 2, I don't see mention of the availability of a marketing budget to market "more" or just maintain it at current levels despite (assumed) decreasing market / sales.

Why senior management would want to cut the budget may have more to do with how big the war chest is to even maintain the current marketing effort. Increasing the budget may be very risky power play if the (short or) long term rewards don't materialize despite the proof to the contrary. The company may just be strapped for cash / cash flow.

I imagine every business would like to take advantage of every good opportunity without regard to resource constraints.

Bob

Strategically, wile others are DECREASING their ad spend, it makes sense to continue your current ad spend at its present rate. Why? Because your competitor's will have LESS exposure in the amrket place and your advertising dollar will carry you that much farther. While a rising tide may lift all boats, its those boats that keep fishing and catching in tough times that do better than those that never leave the harbor.

1) does your personal experience agree with this finding?

Yes, it does. I've been around long enough to have been through many cycles of rise and fall, ebb and tide. I've learned that in tough times you do not necessarily cut back on your spending, you should be spending smarter.

While your competiton is hacking budgets without a care to how each ad campaign performs, they are simply cutting costs. If you take a good look at YOUR ads are performing, keeping the ad campaigns that generate a return on investment above and beyond their cost, you dollar will go much much farther.

To sum up, your competiton is likely cutting costs and killing ads that work to save money, while you are saving cas producing ads tat are EXTENDING your companies ability to earn revenue and expand its customer base.

2) if so, how can a marketing manager justify spending more when senior management wants to cut marketing budgets during recession times?

Simple, run analysis on your ads and determine which ones are producing profitable results. Explain to senior managers, if everytime you give me a dime, and I give you back a dollar, why would you stop giving me dimes?


2a) Should s/he focus on allocation ad dollars to specific media versus others?

Well, if radio is working (generating ROI), and newspapers are not, its rather a no brainer, isn't it?


2b)Should s/he focus on advertising, or sales promotions, or product marketing?

Again, focus on 'winners', and do more of it if you can. Cut the losers or do less of the losers.

3) most importantly, do you know about any companies that are spending more in these weak economy days?

Yes, some of my dry cleaning customers are cutting back on poor producing advertising and switching dollars to CRM programs that produce much bigger returns. In additon, they are slowing losses of customers, improving customer retention, and as other cleaners shed customers, my clients are growing and gaining.

3a) How do they pull it off and what are the results?

Well, my clients have retained me to do data mining and multi-media campaigns for them. We are targeting customers who show great promise of increasing their annual spend based upon their past spending habits. We are offering incentives and rewards as customers change their spending behaviors to move them up the sales and loyalty ladder wile reducing customer quits as much as possible. We use cost efficient direct mail programs, email marketing, text messaging, telemarketing to keep in touch with customers (please note, we are using advanced permission based systems). The results have been amazing. Some campaigns have produced ROI of 1,200 percent (documented) on a marketing investment of $200. I could share specific numbers privately if you wish.

3b)Would be great if you could point me to some data as well...

Um, I'd rather provide this privately, for obvious reasons. If I find a few public links on the net, I'll share them in another post/reply.

Hope this helps you.

Darcy Moen
Customer Loyalty Network

ok..blah ba blah ba blah...I'm a customer. I've seen stores cut down too much cause of "excess cost" expenses. They think cutting down would help them when the times get rough but actually it harms them. Some business get too competitive and when they get too competitive another store comes along and takes them out while the other's got their backs turned.
You got to think of how competitive you are and what's selling and what's not...increas maybe 2 percent to see how that goes in sales and if you've got good clientel still in this money crunch sell a little more of what they're buying and you don't do too much advertisement unless your clientel's visitation is starting to lower pretty good. but you do advertise in other ways as you are normally and don't advertise in the other avenue b ut once or twice a month. see if that helps because it's best to save some and invest in the company and the people. Don't cut back on staff so much as that's why most clients are angry with service. "customers always right" ? Maybe but also people are angry right now because businesses aren't being sensitive enough to their budgets. You want to sell and they want to buy , you figure out the even trade because that's all they ask .You love them as they love you.

Dear Koen

No one so far has taken up the issue of following the numbers. If marketing has run a CRM system, lead tracking and sales forecasting, then the strongest argument is to use this information to demonstrate, preferably over a period of years, the existing marketing spend can be tracked down to the individual orders it generates or to increases in the sales / time graph if you sell through non reporting channels or are in B2C commerce

As most peoples CRM systems are usually a glorified address book, as most lead tracking is what the manager can remember to plonk onto Excel and most forecasting is done on the back of a fag packets and consists of optimistic guesses from sales people who don’t want to predict failure, the majority of organisations cannot do this accurately and in a timely fashion.

As to companies doing more marketing in a recession – 40% of my clients do just that and if I can persuade the other 60% to look at Lead to Order monitoring and Sales Forecasting, then most of the rest will follow suite.

We have taken a decision to launch SymVolli, the sales forecasting and lead tracking tool, in a tough market, simply because it addresses the needs of most companies by providing a consistent and accurate sales forecast. If we get the opportunity to discuss the financial rewards for deploying it, the ROI is often so short that it would be an act of denial of the facts not to use it.

Most companies have products which address some of the needs in tough markets – ours does it directly so we are indeed fortunate. Companies and individuals are still spending money to keep their operations growing. Being able to relate their product’s efficacy in a difficult market to prospects therefore (possibly) means that the sales argument has to be slanted to solving problems the client is suffering from right now

Unless the company intends to rely of cold calling and luck, getting hot prospects from leads demonstrably created as a consequence of marketing is the most cost effective solution, with the largest ROI and the prospect of a shortened sales cycle. Their own sales, marketing and order statistics will show that cutting back on such marketing activities is utterly counter productive.

As they say in the X Files, “The answer is out there” In the figures in this case and the challenge is to mine your data to provide a financially sound case for marketing and to ensure that the execs get a decent return over whatever the period of the sales and ordering cycle.

If you want some further examples look at our SymVolli website (www.symvolli.com) and look at the case studies which should have been posted by now.

Best wishes

Steve Alker
Xspirt (I’ve been asked to leave of the “com” as it looks to much like a URL which should be in my bio!)

I read in ad age or adweek that Kraft is increasing their ad spending. They were attributing it to the fact that more families are staying home for dinner and Kraft's sales are up.