Today, most companies are cutting back on spending in order to weather the current economic storm. Not only are companies reducing employment costs (leaving a 10.3% unemployment rate in Georgia, and 9.4% nationally when this entry was written), but they are also raising costs of products, while decreasing the overall value (read: The Incredible Shrinking Cereal Box). While companies should be focusing on communicating their brands’ competitive advantage in order to boost sales in the marketplace, they are consistently slashing marketing budgets—the primary means of understanding and communicating with target consumers.
While marketing identifies needs and ways to suffice those needs in a market, advertising can best be described as the voice of a brand in the market. Advertising’s goal is to not only increase brand awareness, but cultivate brand loyalty through product differentiation and corporate reputation (consumer trust). Advertising inspires consumers to make (and ideally repeat) an informed purchase decision, and consequently increased sales for a company.
By silencing their advertising voice by cutting marketing budgets, companies are only realizing a short term savings, and forfeiting future potential sales. Companies should capitalize on the opportunity to overcome competitors who have reduced advertising spending, but should spend their marketing dollars wisely—in opportunities with measurable ROI that reach consumers in meaningful ways via relevant messaging. According to a McGraw-Hill study, companies that increased advertised during the economic downturn in the 1980’s had increased sales when the economy improved. “Specifically, companies that advertised aggressively during the recession had sales 256% higher than those that did not continue to advertise” (When the Going Gets Tough, the Tough Don't Skimp on Their Ad Budgets).
With the song “Somebody’s Watching Me” playing and the catch line “It’s the money you could be saving with Geico,” Geico Insurance is surely taking advantage of the current consumer sentiment and flooding the marketplace with its messaging. According to the BrandZ Top 100 Most Valuable Global Brands produced by Millward Brown, their strategy is working. Geico jumped from #11 to #5 in the insurance category from 2008 to 2009.
By speaking with consumers now, companies are building relationships and reinforcing their brand in the minds of consumers. This conversation allows consumers to know and keep a brand top of mind when making a purchase decision, thus increasing the success and longevity of a brand, regardless of the economic climate.
References:
http://www.dol.state.ga.us/
http://money.cnn.com/2008/09/09/pf/food_downsizing/index.htm
http://businessonmain.msn.com/knowledgeexchange/articles/expert.aspx?cp-documentid=20587273&source=officeonline
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2101
http://www.youtube.com/watch?v=RsHXMxoCXeU
http://www.millwardbrown.com/Sites/Optimor/Media/Pdfs/en/BrandZ/BrandZ-2009-Report.pdf
About Me
- eckramer
- Growing up in Atlanta, GA, I moved to New Orleans, LA to achieve my BBA in Marketing and Management from Loyola University New Orleans. After being displaced by Hurricane Katrina, I spent a semester at Georgia State University, but was able to return to New Orleans to achieve my degree. Following graduation, I returned to Atlanta to pursue a coveted career in advertising. Currently, I am working as an assistant traffic manager at a prestigious advertising agency. I am a self-motivated, organized, detail-oriented, advertising professional with a strong sense of project ownership and proactive approach to issue resolution. Although my background has been primarily focused on online media, I have the ambition to learn and master new technologies, processes, departments, and other innovative facets of the advertising industry including broadcast and print production, public relations, communications, and strategy. I interact with a variety of people, personalities, and overcome unique challenges on a daily basis in a highly-dynamic environment under strict deadlines. I am always looking to increase success for myself, my agency, and our clients.