Spending power is staying power

　　Companies that invest in marketing during a downturn, may turn their fortunes around faster, finds Dave Waller

　　Late last year, billboards across London were stripped to bare wood. It looked like a financial hurricane had swept through the City, leaving forlorn-looking frames where slogans and bright smiles should have been. The hoardings were, in fact, part of the Financial Times’ Global Downturn campaign and were there to pose a question: ‘In a downturn, what’s the first mistake that companies make?’ The Financial Times’ message was simple: even if you are cutting costs, don’t stop marketing your wares. If this isn’t bold enough, there are even those who advocate marketing more during a downturn.

　　Tony Jones, chief executive of Pensord, subscribes to this viewpoint. Do it or die! The stronger companies press on during a downturn and come out even stronger. The weaker companies cut back and it’s like denying a plant water – it dwindles and dies, says Jones.

　　To some this approach may seem counter-intuitive. Surely when times are tough it makes sense to cut back on discretionary spend? Past recessions have, however, bred countless examples of companies gaining long-term benefit from being bold with their marketing (see Success Stories box).

　　A bolder approach

　　A McGraw-Hill research study of 600 firms found those who increased their marketing spend during the 1981 recession averaged higher sales growth than those who didn’t, both during the recession and three years after. Right now it may seem like you can’t afford to market your company, but successful companies follow the bolder logic that they can’t afford not to, as Webmart managing director Simon Biltcliffe explains: Basically we run counter-cycle. If people are reducing, we look at ways of increasing to deliver new commercial advantage for our suppliers and ourselves.

　　The great news during a downturn is that you can often get more for your money, according to Jones. With less market activity the value of your marketing pound increases as you do not have to compete so hard for share of voice.

　　It’s inevitable that budgets are going to be squeezed, so it’s about making your money work harder and being absolutely sure it’s going in the right place.

　　Plan well, buy well, be consistent in message, be targeted, be confident in your company’s ability to match the promises and be different, Jones explains.

　　You can also improve your marketing return on investment if you focus your approach to marketing in a more precise, targeted way, rather than going for a blanket approach, says Steve Williams, sales director at Adare.

　　Customers need to leverage the insight and knowledge that already resides in the business about existing customers and prospective customers. You need to consider your current marketing spend and activity and streamline these revenues into the areas that are most efficient, he explains.

　　Gurdev Singh, managing director of Howitt, agrees with Williams’ assessment that channel optimisation is the way forward. The trick is to ensure increased ROI, particularly in a recession, and the best way to do that is to make sure the relevant message is delivered to the relevant person, using the relevant channel at the relevant time. With regard to our clients, the story is mixed as we have seen some decide to scale back their marketing spend, but mostly we are seeing more focus on maximum value, which again fits in with our strategy of helping clients to spend their marketing budget more effectively.

　　Lateral thinking

　　Creativity will be key in the tough times ahead, according to Patrick Barwise, professor of management and marketing at London Business School, who stresses that effective marketing comes from a blend of creative and media strategy. Don’t just curl up and whinge, he says. When the going gets tough, the tough get creative. Webmart’s Biltcliffe agrees: You have to be creative and think laterally.

　　As well as the traditional routes to market, there are plenty of new marketing tools that can help you to get the message out: trackable online adverts, personalised direct marketing and word-of-mouth tricks – such as social networking, guerilla marketing and blogging.

　　Peter Wise, director of Minuteman Press, BPIF Marketing Company of the Year 2008, says that these new marketing tools are a cheap and effective way of getting your message to the masses. For clients, it’s not just about picking one medium. It’s being a lot more savvy and looking at the different tools to find a mix that works well together.

　　Marketing in a recession is about telling a good story, in a creative way as usual, only under increased pressure. Ask yourself: how can we get cautious buyers to respond as we head into the eye of the storm? Marketers will of course maintain that there’s no such thing as a problem, only opportunities. That’s nonsense, says Barwise. This recession is a very big problem. But the opportunities are out there.

　　Finding good ideas to help reach your target audience more cost effectively is what marketing is all about. And it’s got to be an ongoing process, according to Minuteman’s Wise. If a day goes by when we haven’t developed our marketing in some way then that’s a day lost.

　　Unlike Wise, there are still far too many printers out there who think that cutting back and reducing budgets saves the company money and most of the time it doesn’t – in fact, it costs in lost share of voice, Pensord’s Jones believes.

　　The effects of reducing marketing spend can be a bit like the effects of slowing down an oil tanker – the process is gradual. However, once the effect is noticed, or, in the case of the oil tanker, when it has lost forward momentum, it takes significant time and resources to rebuild it.