Three reasons companies cut back on advertising, and why they shouldn't
#1: People do not have the money, so our advertising would be wasted.
Despite being a common view among businesses, studies of every recession since 1940 indicate that recessions have little impact on disposable income. In other words, people may be spending less, but there is money being spent, especially in terms of business to business purchases. All businesses need products and services to stay in business. While the overall spend may be down, they are still buying. If you decide to “turn off the lights” for the next few months and wait it out in silence, your customers will end up buying from your competitors.
#2:Our competitors aren’t advertising.
Measuring what to do by watching what your competitors are doing can be a mis-guided decision. Rather than waiting for business to return to zormal, savvy businesses should cash in on the opportunity that the rival companies are creating for them.
If you are courageous enough to stay in the game and keep promoting when everyone else has backed down can bring about an increase in market share.
#3:The money saved on advertising helps us to control cashflow.
Even more tenuous is the argument that advertising should be cut in order to free up cashflow. Playing “catch-up” to your competitors is costly and risky. What if you don’t regain that favourable position? Your “freed-up” cashflow won’t help much if you’ve lost customers. When a business stops advertising, they are likely to experience a fast erosion of their brand, making room for competing brands to grow.
Consistent advertising message and frequency will help you through the tougher economic times than any drastic measure you may be taking, and you’ll endup in a better position because of it.
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