Retail Selling Ideas

Are your advertisers scaling back their budgets as a cost-cutting measure? When advertisers focus too much on the bottom line, they can lose momentum in the marketplace. According to an article in The New Yorker by James Surowiecki, scaling back to cut costs may in fact cost more in the long run.

Need help convincing your advertisers that maintaining or boosting ad budgets can be in their best interest? Consider the following historical studies:
• According to The New Yorker, during the Great Depression era, Kellogg doubled its ad budget and began to heavily push new product innovations through all media outlets. Post scaled back and cut costs. In the end, Kellogg’s profits increased nearly 30 percent and became the dominant brand despite holding nearly even market share with Post before their efforts.
• MarketSense found that during the 1989-91 recession, Pizza Hut aggressively boosted its ad campaign, delivering value to consumers. Sales rose 61% thanks to strong advertising support. McDonald’s chose to slash their ad budget during this time—sales fell by 28%.
• During the 1990s, most beer manufacturers cut ad budgets but Coors Light and Bud Light increased theirs and saw sales jump 15% and 16% respectively. Other brands were hurt by the loss of so much market share, reports Folio magazine.
• In 2001, amidst market crashes and wartime efforts, Apple introduced the iPod. A risky yet successful endeavor, 125,000 units were sold in the first month of release. Slashing ad budgets was never considered by CEO Steve Jobs.
• In 1975, as recession and gas price woes set in, Chevrolet boosted its ad budget on economy cars, while Ford slashed advertising by 14 percent. Though Ford did what it intended, Chevrolet gained 2 percent market share in an incredibly cutthroat industry.

History is full of failures, but in the business world, real success cannot be reached without accepting risk.

Share your experiences!
Have you convinced any advertisers not to scale back their ad budgets during the recession? Post any ideas as a comment and let’s increase ad sales together.