sourcemediagroup
@sourcemediagroup
sourcemediagroup
As a valued
MAY 2015
current or potential business partner of Source Media
Group, you are a member of an exclusive club. And one of the benefits you receive as a member of the SMG club — in addition to great advertising opportunities — is this regular newsletter. From expert advertising advice; to upcoming events and publications; to profiles of our friendly, helpful staff; it’s all to assist you in getting the best return on investment for your marketing dollar. Your questions and comments regarding this newsletter or any of our publications may be emailed to newsletter@sourcemediagroup.ca ■
Invest in yourself
When the going gets tough, the tough keep advertising
D
espite what Chicken Little and the daily papers would like you to believe, the sky is not falling. A little cloudy, maybe, but definitely not actually falling. How do we know? Because we’ve been here before. Unfortuantely, the first knee-jerk reaction of many businesses in times of economic decline is to cut the marketing budget. Expenses in areas such as promotion and advertising are trimmed, leaving overall corporate sales expected to sail steady as she goes and weather the storm on their own. So why are companies still surprised when it doesn’t really work that way? When you stop advertising, at any time, for any reason, you create an information void, an empty space in consumers’ minds when it
comes to your product or service – and that space is quickly filled by savvy marketers. It’s a decision that might take an instant with results that might be felt far longer in terms of criteria like market share. In fact, most independent research on the subject shows the exact opposite to be true: slow and steady does win the race and those who continue to market through a recession come back even stronger. In a 1987, on the heels of the ‘80s downturn, McGraw-Hill Research conducted a study on marketing in a recession. In their survey of 600 industrial companies, they “found that business to business firms that maintained or increased their advertising expenditures during the recession grew their sales 275 per cent from 1980-1985. Sales of
those that cut their ad spending averaged only 19 per cent growth during the same period.” Going back even further, to the Great Depression, a report in the Harvard Business Review in 1927 concluded that, after tracking some 200 companies, “companies with the biggest sales increases during this period were those that advertised most”. Customers do become more price sensitive in a downturn, but they also become more value conscious and so brand is still integral to them. In a study of more than 500 brands in 33 product categories, sampling more than 6,000 consumers, Millward Brown found that brand has an influence on over four out of every five purchase decisions. And magazines, of course, with their targeted readership and extended shelf life, provide consumers with the brands they trust. “Research shows that market share is highly correlated with the metrics that reflect the relationship between consumers and brands.” (Source: Millward Brown, 2008)