Why you shouldn’t switch off advertising in tough times
with Shaun
The sudden cost of living in the UK has been rising since early 2021 due to the global pandemic.
However, since April 2022, this has increased significantly, forcing businesses to pull the plug on most revenue-building activities, such as advertising.
In times like these, it’s understandable to cut costs as much as possible, but should businesses switch off their advertising budget or soldier through despite the cost?
In this blog, I will list four reasons continuous advertising can help businesses swim through an economic downturn.
1. Reduced Advertising = Reduced Awareness
The problem with reducing advertising costs is that you will, in turn, reduce your exposure.
People are busy and need constant reminders of your brand to be able to consider it. If you go quiet on them, they will go quiet on you.
2. Offer A Helping Hand
These tough times can be an opportunity for your brand to lend a helping hand to customers. By staying relevant and considerate, the likelihood that your marketing will be received well is significantly higher than completely switching off.
Build and cement your customers’ trust and loyalty by launching a campaign to help them through this difficult time. Let’s face it. If you’re not putting your customers first in a cost-of-living crisis, customers will most likely not put you first either.
Take a look at Tesco’s, for example. The supermarket chain has launched its 1,600 Low Everyday Prices programme and extended its Aldi Price Match and Clubcard Price promos as inflation pressures grow. If you scan across their various marketing channels, you will notice that this has been a primary focus in their messaging, ensuring that their customers know they are here to help, emphasising on their mission that ‘every little helps.’
3. Dip Into Low Advertising Costs
Everyone else holding back on advertising budgets has a knock-on effect. As the demand for advertising drops, costs per advertising spots decrease. This makes it the perfect time to take advantage of lower costs per impression and use your current budget to increase your awareness, lead generations and conversions.
The reality is that fewer companies compete due to tightening their belts. This increases your chances of boosting your sales through marketing.
4. Sales Growth
You need to consider advertising as an investment, not an expense. Cutting your advertising costs may save you money in the short term but will be harmful in the long run.
Here are three statistics I found that prove sales growth during challenging financial times:
- According to an MSI report, most UK finance directors suggest that businesses should increase their advertising spending during difficult times.
- Further research by McGraw Hill found that companies who maintained or increased their advertising grew by 275% more than companies that held back.
- Analytic Partners studied over 700 brands in more than 45 countries and found that most saw an ROI increase during the last recession.
However, it’s easier said than done.
Taking the plunge can be a risk, but you cannot ignore the long-term benefit of increased exposure and customer loyalty which ultimately will improve sales growth.
Instead of pulling the plug, rather reduce your advertising spending if marketing is not practical for sales growth at this time. Use this multiplication by Prof. Dr Koen Pauwels to outline the best advertising budget:
- Product’s contribution margin X
- Expected (baseline) sales X
- Marketing effectiveness (% sales increase for a 1% spent increase)
Once working out an appropriate budget to keep your advertising alive, it’s important to remember that timing and approach are crucial for the success of advertising during inflationary periods.
Get your message across in the right way.
While it’s essential to keep your advertising switched on during the financial crisis, your brand must ensure its message is carefully delivered. It needs to be relevant to how your audience is feeling and responding. At CNS, we can help you develop and deliver your message during these through strategic advertising.
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