SherpaBlog: Recession as Marketing Bonanza - a Contrarian (Yet Realistic) View

By Anne Holland, Content Director

For marketing-lead companies, a recession can be seen as a golden opportunity. Your competitors are slashing their budgets, pulling back on brand marketing in particular.

At the same time, ad costs are dropping. Media companies, used to the fat of good times, slash prices and extend special offers (i.e., get three ezine ads tossed free in with every 12x drive-time radio spot) to keep their bookings stable.

It’s the perfect time to build market share at lower cost. When the economy comes out of its funk, your bigger slice of the market pie grows more profitable daily.

If your CEO doesn’t see a recession as an advertising-buying bonanza, try explaining it to him or her with a stock market metaphor. To succeed on Wall Street, you buy as much of blue-chip stocks as you can when their prices are unusually low. Then, when prices invariably rise again someday, you’re suddenly wealthy.

2008 could be your brand’s year to “buy low” for future wealth. How can you know if this will work for you? Four qualifiers:

- If you work for a public company -- or one that’s focused solely on revenues for this particular quarter, future thinking be damned -- then this strategy is not for you.

- If your lead generation or direct sales are driven heavily by search PPC advertising, expanding your other brand marketing in a recession can help raise PPC results by up to 40%. People recognize your brand, so they are more likely to click on your ad and more likely to convert. Your branding investment pays off both now and in the future.

- If you are in a highly competitive field, jostling with dozens or even hundreds of competitors, a recession can be a golden opportunity to rise to the top of the pack. Prospects can probably only remember and consider three to five brands in your niche. If you advertise heavily now when it’s getting cheaper every day, you may wind up being one of those three to five brands who automatically make everyone’s shortlist for years to come.

- If you are a new brand or start-up, a recession can provide unusually fertile marketing ground. While the major brands cut back on their ad presence to ride the storm out, you can make a bigger launch impression on the marketplace than you would in good times when too many brands are fighting for prospect’s attention. Have you ever wondered how so many brands, such as Apple's iPod, Wikipedia, Sirius Satellite Radio and, yes, MarketingSherpa, could be successful when they launched during bad recessions or depressions?

Success, as with every marketing tactic, starts with initial measurements. You need to know three things about your brand … and be able to measure them on an ongoing basis to prove your worth to the CEO and management:

#1. Market share
What’s your slice of the pie? Where do you stand in relation to other brands in terms of accounts or sales within the market? What’s the total market size currently? How about the projected market size for three years? If your marketing efforts can win a percentage point of share, how much will that be worth to the bottom line?

You may want to break this out by market segment. Data is available from industry associations, industry analysts and researchers, and via surveys conducted by media. Start with a baseline measurement now and update quarterly if possible, annually at least.

#2. Brand perception
How well known is your brand name now? Do prospects recognize it? Do they think of it as being “The best”? Do your PPC ads do better with your brand name in the copy or URL or better with it removed?

Data is available via third party surveys -- talk to your marketing partners (perhaps other brands who target the same segments for complimentary products) to see if they’ll run a survey for you if you run a survey for them. Media and research firms will also run surveys if you ask (and pay.) Consider measuring every quarter or six months, depending on how heavy your branding investment is and how much your management team need to see “pay off” via results data.

#3. Media costs
In a recession, media rate cards may not change much officially, but there’s often a lot more room for negotiation. Start your research by gathering the rate cards, or estimated costs, for all relevant media buys for your segments now including list rental, print ads, exhibit booths, radio, TV, white paper syndication, etc. Your goal is to establish a baseline.

Then as you negotiate media buys through the next year, report on real-life costs per impression versus official or old costs. This way you can show the management team that you are getting more for your money from the same marketing dollar.

In the end, even if your brand’s overall sales and/or profits are not growing as quickly as they used to, the marketing department can look like heroes because they are increasing market share and brand value -- setting up the company to be a huge winner in better times to come -- all while saving money.

You can be a recession rock star.