There could be a recession coming—or not—but some advertisers are behaving as if one has already started. Responding to media buyers looking to cut ad budgets has become a priority.
For VPs: The Dollars Go Further in Slow Times
If it’s a marketing person you are talking to with strategic involvement, argue the benefits of maintaining an ad program during slow economic times. Business history books are full of examples of companies that maintained or increased their ad budgets during recessions and found that at recession’s end they had leap-frogged their competitors by wide margins.
My favorite story is the one between the Kellogg’s and Post cereal companies who raced neck and neck in the 1920’s to dominate the breakfast cereal business. When the Great American Depression came in the 1930’s Kellogg’s kept their advertising going while Post cut back. When the Depression ended so had the race between them as Kellogg’s emerged the dominant player, a position they have maintained to this day.
Ask About Their Recession Product Strategy
Smart companies don’t just cut during a recession, they reformat their offerings. They may introduce a lower cost line to hold on to customers, they may offer a price program designed to keep consistent customers consistent, or they may offer special discounts designed to offer temporarily lower pricing.
Now Re-Rationalize the Ad Budget
If someone tells you they are cutting back their ad budget because of a recession, ask why they advertise in the first place. There are many ways companies internally rationalize their ad spend. Some advertise only because their competition does, but if their competition cuts back during a recession, they may as well. Other companies advertise only when new products come out but during recessions they may introduce fewer products. Don’t just accept a budget cut because revenues are down as a given. Find out what the original rationale was and find a way to rethink it. The reasons to advertise during the good times may not be the same reasons to advertise during slow times.
For Media Buyers
Talking marketing strategy will not save you from a recession-driven media buyer when the cuts come. By the time media is involved, typically they have their marching orders, and their number. When the cuts come, buyers will divide all media into two categories; essential and non-essential. You need to be in the later.
Right from the start you have to find ways to preset your media as being absolutely essential. Ask your advertisers to consider that all recessions end and this one will be no different. Remind them that over the past half-century, there have been nine recessions, lasting an average of 11 months each.
But every publication will claim to be essential. You need to be specific. For b-to-b, that means if you stay in my publication you will stay close to the technical buyers who will be reevaluating these technologies, even as their budgets fall. It is essential they understand how your new reduced spec offerings can help them get through these lean times. For consumer titles, even in recessionary times women find ways to make themselves look good. If they can’t afford a whole new outfit they will often find their way to the cosmetics counter where your products, among others, will be waiting for them.
Sell the Web
Maintaining a dialogue with your customer base is good advice for your business as well. During the 2002 recession, I used many of my new Web offerings to keep advertisers active during those slow times. I sold them aggressively to keep advertisers interested in my magazine brand and on my active advertiser list. It was a great way to keep the dialogue going with my advertiser base.
Look for the Slump Star Companies
During the 2002 ad recession I had clients who strategically used the recession to pull ahead of competition. They did not cut back; they kept their marketing aggressive, they kept budgets on track and they saw significant gains on the competition. I found that if I stuck close to these companies and spent extra time with them, my business improved, as did theirs.