This link will take you to just one of numerous articles and reports coming across my radar screen recently documenting the advantages of investing in marketing during economic downturns, especially in innovation and advertising. Again and again history shows that those companies that have the wherewithal to prioritize long-term growth over the short-term bottom line and spend during recession come out the better for it at the other end. They gain market share and are better positioned to further build their business as the economy enters a new period of expansion.
Continued investment in innovation means companies can widen the performance lead between their products and those of their competitors more quickly and significantly as those competitors cut back on R&D. This is good for both the post-recessionary period, and the immediate present, since it means companies can strengthen the performance side of the value for money equation of their products precisely when consumers are re-evaluating their brand choices.
Investment in advertising means companies get more bang for their buck, as media gets less expensive in the wake of competitors’ budget cuts. So the absolute out of pocket decreases at the same time share of voice increases.
Despite my own personal passion for social media and the great promise it holds for marketers, it cannot be denied that above-the-line communications still build business. The data is there. I’ve seen it with our clients. When we invest in above-the-line spend, business increases — presuming we’ve got something worth saying — and the ROI’s are right. In a recession, those ROI’s will be even better.
So while I wouldn’t deny, as many now say, that social media can be especially valuable in a recession because it helps companies strengthen relationships with their existing consumer base, no one should think it can be a substitute for the broad scale competitive advantage above-the-line media can achieve for brands in recessionary times.
Especially in a recession, it pays to advertise!