Whenever the economy tanks, the first thing most execs look at is cutting the advertising budget. Short-term, this seems like a logical move to help the bottom line, but in the end, it’s the brand that suffers. Ultimately, the decrease in share of voice and resulting brand awareness and understanding will hit the top line and bottom line. With the proper positioning, the strong brands not only survive, but thrive in tough times.

What some people may not realize is that during an economic slowdown, when other brands are reducing their advertising budgets, savvy brand managers are able to make their advertising work much harder for them. Any media buyer will tell you the law of supply and demand is only exaggerated in the media business when times are tough. Here are a few key reasons.

1) A soft ad market means that media reps making commission are going to be hungry and willing to fight for a piece of business.
2) The media is inclined to provide more value added exposure rather than a reduction in advertiser dollars. They may provide incentives to maintain spending, year-over-year, rather than look at increases in spending.
3) The clock is ticking. Whether the media is selling time or space, unsold inventory has a very short shelf life.

Some of the most powerful brands have been built or had significant impact during past recessions. Wal-Mart launched their campaign for “Every Day Low Prices” in 2000 and 2001. Now Wal-Mart is one of the strongest brands for bargain shopping. At Abbey Mecca, we were able to increase GRPs by 17% for a TV client with the same ad budget as 2008.
Here are three things you can do to make the most of your advertising spending in a slow economy state:

1. Never accept the first rate. In fact, you should plan on at least three rounds of negotiation.
2. Do your homework. Research the cost for the media you are considering. Look for historic CPM (cost per thousand) so you have a benchmark of the media value and discount.
3. Look for “remnant” opportunities. If your timing is flexible for your campaign, you may be able to pay pennies on the dollar for ad time and space with distressed or unsold inventory.
4. Keep an open mind – look for new opportunities and new media. What may not have been feasible last year might be reasonable now at the right rate.

If you have questions or want to share your thoughts, please email me at ignite@abbeymecca.com.

~ Diane

This entry was posted on Tuesday, July 14th, 2009 at 10:13 am and is filed under 03. Communication. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.