While we’re not at recession levels yet – and hopefully won’t make it there – we are all undoubtedly feeling the economic impact of the current public health crisis. For those that own or manage a business, you may have begun to cut back in various areas, including in your marketing. But did you know that many brands actually benefit from maintaining ad spend during slower seasons?
It seems like common sense that if you advertise when everyone else stops marketing, you’re bound to increase sales and build market share. But in times of economic downturn, one of the first things companies tend to do is pull back on their marketing and advertising efforts. While it may feel safer to cut back now, studies over the decades have shown that companies that maintained or increased their ad spending during a weakened economy came out the other side with increased sales and market share.
Here are just a few examples of companies that managed to stay top-of-mind amidst economic slowdowns…
- During the 1990-91 recession, McDonald’s dropped their advertising budget. Pizza Hut and Taco Bell responded by upping their game – resulting in a 61% increase in Pizza Hut’s sales, a 40% increase for Taco Bell, and a 28% decrease for the Golden Arches.
- Jif & Kraft similarly increased ad spending in the ’90-91 recession – coming out on the other side with sales growths of 57 and 70 percent, respectively.
- During the Great Depression, cereal industry leader, Post, nearly cut ad spending in half, while rival Kellogg’s doubled their spend and launched a new product, Rice Krispies. The result? Kellogg’s grew their profits by 30% and overtook Post as the industry leader – a position it still maintains today. Oh Snap…and Crackle, and Pop.
Although times are uncertain and the light at the end of the tunnel may seem distant — we will get through this. How you advertise and market your brand in the midst of it could lead to long-lasting benefits on the other side. It’s like the old adage says, “When times are good you should advertise. When times are bad, you must.”
So, when is the right time to market your business? All the time. And in the good times and bad – MadCap can help.