Tough times are opportunities for advertising
December 10th, 2008
Posted by Jose Villa
A recent Knowledge@Wharton article, referencing opinions from a couple of Wharton business school professors, makes a very strong case against cutting advertising budgets during economic slowdowns . You can read the entire article here.
According to the Wharton professors, slashing advertising spending during recessions is a bad idea for a couple of key reasons, including:
– by cutting advertising spend, companies reduce their share of voice and therefore open the door for competitors to fill in the gap and make inroads
– with reduced demand for media, media costs go down, making advertising more attractive and defensible in a bad business climate
– research shows that companies that consistently advertise during recessions perform better in the long run
The article notably made a case for increased digital advertising during difficult economic times, specifically:
– An economic slump may be a time to reconfigure the advertising mix between traditional media and digital or other outlets
– while all forms of media can be successful in a recession, the impact of digital marketing might be easier to quantify and therefore able to withstand the close scrutiny of senior executives demanding more justification for spending
All of these points apply to multicultural advertising. Companies that have invested significant resources to establish strong brands with multicultural audiences risk losing those gains if they too drastically reduce advertising budgets. We’re also see prices coming down for multicultural media – which is a good thing for advertisers.
I think the most poignant statement was that a downturn is a natural time to focus on core strategies. If the multicultural markets are part of that core strategy, then now is the time to invest in continued advertising to these markets.
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