June 2010 Newsletter

Effective Advertising Workshops Newsletter
Volume IV Issue 6

In This Issue

The Value of Advertising During An Economic Downturn

Some suggestions...

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June/2010

Dear Reader,

Thanks for looking us over, our mailing list now has over 5000 monthly readers.

In the advertising world, especially the radio and television world that we live in, business ain't bad. Like the unemployment numbers however, it is important to know where those dollars are coming from. Many markets are enjoying some spirited primary elections and the expenditures - FOR A PRIMARY, no less, are through the roof. Political dollars, nice increases from the automotive field, millions of dollars from the pharmaceutical companies, and a few odd and ends here and there....most broadcasting companies are allowing themselves to take a couple of deep breaths. Newspapers are still on a slippery slope, and yellow page revenues are plummeting.

Don't be short-sighted, you electronic media gurus - 2011 has no Olympics, no political campaigns, no huge economic boost, where are your dollars coming from?

Did you stop advertising? Did you take a "time-out?" Have you cut back on your advertising until this "tide turns?" Pay attention to history.
From American Business Media, the Association of Business Media Companies, comes this timely article.

It is critical to maintain a market presence during a recession.

The Value of Advertising During An Economic Downturn

History has proven companies that maintain or increase their advertising investments in periods of economic downturns increase their sales and share of market, both during and after the downturn.

Here are the facts:

Maintaining or increasing advertising budget levels during economic downturns may be necessary in terms of protecting market position vis-à-vis forward looking competitors.¹
If a company fails to maintain its "Share of Mind" during an economic downturn, current and future sales are jeopardized. Maintaining "Share of Mind" costs much less than rebuilding it later on.²
If during an economic downturn you maintain a strong advertising presence while your competitor cuts his budget, you will automatically increase your "Share of Mind"³
Advertising through both boom and down times sustains the necessary brand recognition.⁴
Maintaining a company's advertising during an economic downturn will give the image of corporate stability within a chaotic business environment, and give the advertiser the chance to dominate the advertising media.⁵
Economic downturns reward the aggressive advertiser and penalize the timid one.⁶
During an economic downturn, a strong advertising/marketing effort enables a firm to solidify its customer base, take business away from less aggressive competitors, and position itself for future growth during the recovery.⁷
When times are good, you should advertise; when times are bad, you must advertise.⁸
Advertising in an economic downturn should be regarded not as a drain on profits, but as a contributor to profits.⁹

¹How Advertising in Recession Periods Affect Sales, American Business Media

2 Ibid

3 San Diego Executive Magazine

4 Making A Recession Work for You, American Business Media

5 Ibid

6 The Strategic Planning Institute

7 Coopers & Lybrand

8 Making A Recession Work For You, American Business Media

9 Harvard Business Review

We have heard about too many businesses who have cut back and are waiting for that turnaround to happen. When it comes, don't be so far down, don't lose too much market share that you can't come back.

Start Advertising Today!!

Some Suggestions...

We got a phone call from some friends of my son. They are opening a new business and my son told them I might be able to give them some suggestions. Here's a copy of the email I sent them.

Dear Ricky and Matt,

To begin with, you must find out who are yourcustomers?

Where do they live?

What are their demographics?

What need is your business filling?

What is your unique selling proposition or "brand"?

Trade magazines from your industry will help you find your market. Focus groups, informal surveys, present and past customers, your competitors and good old fashioned research are necessary to help you find your market. Once you know who your best potential customers are and where they live, then we can determine how to reach them and convince them to try you out. People that go out for something to eat usually have 4-5 restaurants in their regular list. You need to get them to try your restaurant. If they like it, your restaurant will become part of their routine and their least favorite restaurant of their current list will be dropped. You get customers to try your restaurant by word of mouth from friends and relatives. You cannot depend on word of mouth advertising to be successful. We have businesses all over the USA tell us "we survive by word of mouth". Key word - survive. If you want to thrive, you must advertise on mass media to spread your word of mouth to thousands of eye and ears.

The three most important factors in a successful advertising and marketing campaign are reach, frequency and consistency.

You must reach a fair percentage of your potential customers; have enough frequency of advertisements to break through the thousands of ad impressions that hit us every day; and be as consistent as your budget will allow. The biggest mistake small businesses make? Not putting together an annual marketing and advertising plan, AND, never giving it time to work. Advertisers are constantly trying different media, whoever has today's "deal", trying this and trying that and never giving any one media time to do its job. All advertising works - pick one vehicle that makes sense, use it correctly and efficiently, and give it time.

Only electronic media (radio,TV and cable), can effectively brand a business. Having a recognizable brand only means that you have a chance to compete for market share and gain some attention. It might be wise to coupon within a reasonable distance of your restaurant. Adding broadcast to call attention to the coupon will double and triple the usual 2% return.

I feel it is important to add "pizzeria" to your name. Most people would not be able to associate your restaurant with anything and would have no clue what you do or sell. What if you saw or heard an ad for "Fred's", and one for "Fred's Fine Furniture"? Which tells the story - INSTANTLY?

I feel that radio would be a good place to start (along with couponing). Four - six month schedules on selected radio stations can be very effective and reasonable. Promotional add-ons from the radio stations are readily available. NOTE: It is possible to do the same with television - but you must be selective and be prepared for a higher cash outlay.

There are two parts to advertising: art and science. The art is the commercial or the ad. The most creative advertisement is wasted if scientific, proven facts regarding the placement, number, and media used are not followed. Miller Beer had a great campaign called "Man Law". Critics raved about the commercials and consumers loved them, but sales were flat. Make sure your commercials will reach a sufficient number of people, maintain a good frequency of those commercials and be as consistent as your budget will allow.

If you have any questions or need some more information, feel free to call me any time.

This summer seems typical...hot and humid. Let's all hope it's busy as well. If you need a question answered about your marketing, or any type of advertising, or your logo or "brand", or how to reach new customers, or the pricing of various media, please contact us.
See you next month
Our email address: Effective Advertising Workshops, our phone # 843 552-0702

Sincerely,

Larry Kirby
Effective Advertising Workshops

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