Why are some businesses at the mercy of economic cycles – riding high in good times and then plunging sickeningly in recessions, while others look like they’re immune to the economy – staying comfortably level or even growing in downturns?
There’s a lot of evidence to suggest that their attitude to advertising and marketing is what makes the difference.*
Companies that are locked into a stressful cycle of business ups and downs view advertising as an EXPENSE, and those who consistently do well view it as an INVESTMENT. They are two opposite points of view, which result in different experiences both during and after a recession.
“When times are good, you should advertise.
David Ogilvy – The Father of modern advertising
When times are bad, you must advertise.”
‘Always-on’ advertising is an enduring competitive advantage
People never completely stop buying things – there are always people making purchasing decisions every day, no matter what. They just become more selective in what they buy and who they buy it from – and that would be the businesses who are still advertising.
‘Always On’ advertising is what it says – a strategy where you’re always in front of your prospective customers or clients with intelligently targeted, value-driven messaging, so that when they’re ready to make their buying decision, you’re their first choice.
But you don’t have to take our word for it…
IAIN MCPHAIL, DCM ROOFING
“‘Always On’ advertising with Pinnacle&Co. is our secret weapon.
We’re in front of potential customers consistently throughout the year.
It’s great for awareness of our business, and we’re always there when they want to pull the trigger.”
In the months after the pandemic recession, the Wharton Business School at the University of Pennsylvania conducted a survey of marketing managers throughout the USA to see how changes they made in their advertising expenditure affected their company’s profitability.
It came as no surprise to ‘Always-On’ marketers (like us at Pinnacle&Co.) that the results of this study mirrored the many, many similar studies that have been made ever since the Great Depression.
The Wharton team found that businesses which increased their investment in advertising and product innovation during the recession grew their market share and profits, not just in the short term, but in the long run too.
‘There is no evidence that cutting spending in a recession improves profits, growth or share in the short or long term. In fact, our analysis strongly indicates that investing during a recession is a smart and valuable investment, particularly through the lens of growing profits, share and firm value.
The historical evidence is clear, the return per dollar spent may never be greater than what can be gained by spending in a recession.’
Findings From A Forbes-Wharton Survey Of CMOS by David J. Reibstein1, Stephen Diorio2, And Raghu Iyengar3
In other words, businesses that advertise consistently, regardless of market conditions, build stronger brands, enjoy better customer engagement, and come out of downturns stronger.
Procter & Gamble (P&G) maintained and increased marketing spend during COVID, leading to surging revenues in 2020. P&G executives stated their goal was to emerge stronger, and they did. On the other Coca-Cola, who you’d think would have known better, cut their advertising investment by 35%, pulling $2 billion from their budget. The highly predictable outcome was that Coke’s revenues dropped 11%, while their arch-enemy Pepsi, which kept its ads running as normal, grew its revenues by 5%.
Is business good? Yes ‘always’
The first step in any ‘Always-On’ advertising strategy is the strategy itself. It’s not enough to just put your name out there and hope for the best. Every aspect of your advertising and marketing strategy needs to be carefully considered and validated.
That’s why Pinnacle&Co. have a clear strategic development process that makes sure your advertising reaches the right people with the right message in the right place at the right time, so you get the results you want regardless of the prevailing economic conditions.