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Why We Can't Stop - Part 1/2

Why pausing advertising during a recession is a deceptively bad idea - this is our summary of an article which appeared in Forbes. For the full article, please click here.

When A Recession Comes, Don't Stop Advertising

Brand consultant Brad Adgate says COVID-19 is likely to scare a large proportion of the market into freezing their ad budgets. In the aftermath of the 2008 recession, US ad spend dropped by 13% – newspaper spend decreased the most with a 27% fall, radio dropped 22%, magazines were down 18%, OOH 11%, television 5% and online 2%.

The inclination to drop advertising activity, though tempting, is a passive and counterproductive response, says Adgate. Rather, he advises staying consistent and even increasing communications.

Here’s why:

A prime time to advertise is when your competitors aren’t. Taking advantage of a quiet category leverages your brand with more relevance and maintains your consumer ‘share of mind’. Media space also gets cheaper, as advertising becomes a buyer’s market.

Showing strength and communicating an exchange of value are also important reasons to advertise during economic hardship, says Adgate. Giving your consumer the impression that your brand is able to continue as normal through COVID-19 lets them know you are reliable and worth trusting. In addition, showing consumers how you can deliver value that is relevant to their present situation cements a firm brand value that will carry over out of the recession.

It’s how Kellogg’s beat Post in the cereal category during the Great Depression, and how Toyota surpassed VW in the US in 1976.

And not advertising is how McDonald’s lost 28% on sales during the 1990-1991 recession (while its competitors Pizza Hut and Taco Bell saw a 61% and 40% sales increase respectively).

Adgate says he takes inspiration from Wal-Mart founder Sam Walton, who when asked, “What do you think about a recession?” responded, “I thought about it and decided not to participate.”

Key Points

  • According to Brad Adgate, advertising activity typically falls during a recession, creating an inexpensive and vacant marketplace to take advantage of.

  • Advertising during a recession or turmoil communicates your strength, stability and reliability to consumers

  • Maintaining ‘share of mind’ during COVID-19 protects and accelerates brand affinity when consumers start to feel normal and confident again

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