When you call the current economic situation a down economy when you are talking with your customers and prospects, you imply that the economy is going to be down for the foreseeable future and things are going to be bad for the long haul. The description of a down economy gives the perception that advertisers should take a defensive position, hunker down, grit your teeth, hold on and hope for the best, there is no improvement on the horizon. The term “a down economy” is void of hope and expectation. Using the words “down economy” when trying to help your customer with their marketing plans could be the worst possible thing you could do for your customers and for your own selling career.
Advertising in a down economy has the ring of futility to it. Sure, there is lots of evidence that supports why a business should continue to market when times get tough, but consider the psychological implications of using the phrase “advertising in a down economy” versus “advertising in a recovering economy”.
This is a recovering economy. The stock market is up 50% from March. Historically, bull markets begin six months before a recession ends.
According to a survey by the National Association for Business Economics, U.S. companies are expected to hire and invest more in the next six months. The group’s latest Industry Survey reinforces the view that a recovery is well underway in the world’s largest economy.
Firms were confident of economic growth in the next year, with 73% of respondents expecting the real GDP to expand between 1% and 3% in 2010.
Industrial demand grew for the first time in five quarters in the July to September period, with the goods producing sector, services sector and the finance, insurance & real estate sector, all reporting a rise in demand. Further, profit margins were on the rise for the first time in seven quarters, albeit at a modest pace.
The latest data shows that unemployment is moderating. Fifty six percent of the respondents expect no change in unemployment. Twenty four percent expect employment to rise in the next six months. Only four percent expect further layoffs.
Seventy six percent of the companies surveyed said their profit margins were either unchanged or up slightly. Twenty eight percent said they raised prices on their products and services to achieve higher profit margins.
So, stop talking about “advertising in a down economy” and start talking about “advertising in a recovering economy”.
Advertising in a recovering economy implies a more aggressive posture than advertising in a down economy. The time is now to increase advertising spend because the activity that the experts will point to in a few months as evidence that the economy is recovering is happening today, right now.
Local businesses who wait until it’s clear to everyone that the economy is recovering will be getting back into the market late. Trying to time your advertising is like trying to time the stock market. All too often, you buy when the market is high and you sell when the market is low. Investing for the long term is by far the most profitable strategy.
Advertising for the long term is clearly the most successful strategy in marketing.
Just like money losses in the stock market, the business that tries to time their marketing efforts to the economy suffers market share losses. When the experts report the economic news, they are reporting the history of the economy, not the future. Waiting to hear that the recovery has arrived is like showing up for the train fifteen minutes after it has left the station.
More than half of the companies that are listed on the Fortune 500 were started during a recession or a bear market. Companies like Home Depot, Microsoft, Verizon were all started during economic downturns when credit was tight, unemployment was high and the news was bad. No company can predict their future success. Nor can they predict a spot on a future Fortune 500 list. They had an idea to fill an opening in the market. They went forward with their ideas despite the bad economic news. Today, they are giants of the economy.
Tell your customers to start advertising in a recovering economy right now. Help them see how increasing their advertising spend now will help them grow their market share exponentially over their competitors who have cut back or stopped altogether. Illustrate the concept of Share of Market Voice and demonstrate why right now is the best and the most opportune time to get started.
When you look back through history and track the most successful companies in America, you will find that they were consistent with their marketing efforts. They didn’t try to “time their marketing” to the economy. They kept their message out there on an ongoing basis.
The most successful companies found the right balance between reach and frequency for their budget. They took their egos out of the equation and relied on the data to lead them to the optimum reach and frequency combination for what they could afford to stick with for the long term.
The market leaders focused on their compelling creative message first before thinking about the medium. The legendary advertising expert, David Ogilvy said “If it doesn’t sell it isn’t creative”.
The retail activity that will be used in future economic reports is happening right now. Businesses that are not inviting those customers to come do business now are missing the market.
When the news media finally reports the recovery is here, today’s customers will belong to the other businesses who were smart enough to advertise in a recovering economy.
— Spike Santee, President, Spike Santee Dot Com, Inc. Spike is currently SVP/Market Manager for Cumulus Media in the Topeka market. He’s been with Cumulus for nine years.
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