November/2008

Greetings!

The economy is certainly on everyone's mind. As we go to press this month, the jury is still out with regard to this years' retail Christmas sales.  With what is going on, we felt it best to devote the entire newsletter to the present state of affairs. Over the years, it has been proven, beyond a shadow of a doubt, that during slow economic times, the companies that maintain their brand always come out ahead. Branding your business should be your #1 objective in 2009.

 Our last seminars in 2008 will be in Lafayette, LA - we hope to see you!

Nine Marketing Tips in a Weak Economy 

 Smart marketers work harder in a recession and, as a result, invariably increase revenues, profits and market share. That dynamic has held up for all post-World War II recessions studied since 1949.

As you face the challenges in today's economy, here are 9 tips to consider:

• Don't cut your budget. Chances are that your competitors are cutting theirs. By holding on to yours, you've got a great opportunity to increase market share. And your customers will be likely to stick with you when the economy improves and you have an even larger market in which to have a greater share.
• Reevaluate your target audience. This is a good time to look more carefully at your target audience. Has it changed? Has your choice of media channels kept up with those changes? Are you accurately identifying and focusing on your most productive customers?
• Consider making offers. We all like a little something extra when times are tough. Consider making an offer that rewards your customers and delights them as well.
• Beware of discounting. I recommend against it. Price cuts are hard to restore. Add to value. Don't discount the price.
• Use interactive marketing. If it isn't already an important part of your mix, make sure that it is. After all, it provides measurable results, costs relatively little (vs. other forms of advertising) to maintain and use, and keeps customers engaged, even when they're not buying.
• Focus more on social marketing. During a recession, big-headline ads that raise awareness and reinforce brands are not nearly as influential as the recommendation of a friend or someone who matches your customers' profile. So a favorable review on a blog may have a whole lot more impact than a quarter-page ad. If you don't have a social media marketing strategy, get one!
• Entertain your customers. Let's face it. We're in a gloomy time. Anything anyone can do to cheer us up is a good thing. What can you do to show your customers a better time?
• Build your database. Look for every opportunity to capture the names and e-mail addresses of your customers and develop two-way communication with them. A strong database enables you to leverage your marketing dollars even further.
• Be bold. That's right. Recessions are often opportune times for new product launches and new ideas. Here's a short list of what came out during previous recessions: the brand-management system, airline loyalty programs, the IBM personal computer, the iPod and fast-food value menus. And both MTV and CNN were launched during recessions.

We're in a season of opportunity. Seize it! -David M. Rawle, Chairman of Rawle Murdy Associates Inc.
 
 

Snapshot of Media Plans & Budgets for 2009

 At the "Masters of Marketing" Conference by the Association of National Advertisers recently, 1,200 client-side marketers, media and creative agencies and others, were polled via handheld devices about their marketing mix, budgets, plans and tactics throughout the event. The results are shown here:

Adjustment to current marketing and media plans to account for the recent downturn in the financial markets:

• 33% say spending will be reduced
• 33% say spending will be constant/ marketing mix will be reallocated
• 27% expect to spend more
• 8% will keep everything status quo

 CEO view of marketing efforts with respect to growth:      

• 56% think of brand-building as an investment
• 21% think it's an unaccountable but necessary expense
• 15% are not sure
• 8% consider it an unnecessary expense

Preferred social media site for driving brand growth:

• 32% say none
• 20% say YouTube
• 18% say Facebook
• 12% like them all
• 10% say LinkedIn
• 6% MySpace
• 3% Twitter 

Plans for Marketing expense in 2009 vs. 2008:

•  26% plan to increase spending by more than 10%
• 13% plan to increase spending by less than 10%
• 28% will hold stable
• 14% will decrease spending by less than 10%
• 19% will decrease spending by more than 10%

The largest branding discipline offering opportunity for growth:

•  17% choose traditional 30-second spots
• 7% like one page advertisements in a newspaper/magazine
• 16% pick web advertising
• 28% choose social media integration
• 7% feel Direct Marketing
• 19% think grassroots, viral public relations
• 5% like radio

Company's current measurement of brand growth:

• 70% say sales and net income
• 15% use third party brand equity valuations
• 9% think shareholder value
• 4% measure by household penetration
• 3% say company culture

Source: Association of National Advertisers, October 2008

 Advertising in an Economic Downturn

 (continued from last month's newsletter)

 The Experts' Take on Cutting Marketing: "Marketing cuts can demonstrate fiscal restraint. While marketing seems like an easy place to pare, ultimately, because a lot of traffic you're driving is through marketing and promotion, you're really cutting off your nose to spite your face" - Darren Tristano, EVP Technomic.
Marketing cuts in 2002 bought time, but problems didn't get better, they got worse. McDonald's boosted marketing spending as part of its "plan to win" in 2003, and sales at stores open at least a year soon soared." - Larry Light, former global CMO, McDonalds

What Defines a Recession?: A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales...most recessions are brief and they have been rare in recent decades - National Bureau of Economic Research.
In March 2008 Martin Feldstein, President of NBER, predicted that the U.S. is in a recession

Major Media Agency Carat Says "It's Time to Spend": Multiple studies have confirmed that the best strategy in terms of long-term ROI is to increase marketing expenditure during an economic downturn. Cuts in marketing often create long-term problems that are hard to fix once the recession has ended.
A study by Paul Dyson of D2D found that cutting ad spending caused financial damage that affected marketers for three years. To regain pre-recession sales levels, it needed to spend ^0% more after the recession than it saved by cutting its ad budgets in the first place.

Previous Recessions Spawned Revenue Blockbusters: In October 2001 after 9/11, Steve Jobs unveiled the first iPod. During the 1990-91 recession Wal-Mart opened stores across the Midwest, making it the fastest growing period in its history and posted double-digit profits. During the 1980-82 recession, Ted Turner founded CNN  in 1980 and MTV launched a year later. In 1981, American Airlines and Delta launched miles-based loyalty programs.
Brands who advertised converted competitors' customers: Kellogg took market share from C.W. Post during the Great Depression. Sears, Roebuck & Co. took share from then- giant Montgomery Ward during WWII. Pizza Hut and Taco Bell stole share from McDonald's during the 1990-91 dip.