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Don't Cut Your Ad Budgets - But Do Spend Wisely
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Dec 26, 2008 by Mark MaierFrom our post earlier in the week about the Grinch, MediaPosts Pam Horan cites new research why your clients should adopt the attitude of "Flying Towards Quality When The Economy Is Grounded". With the East Coast seeing some stabalization and gains in sales figures and economists stating that mid 2009 should see things start to climb in the economy, your clients will either play catch-up (always more expensive) or retain or even grow thier market share now by continuing to market wisely......"In a report entitled "Learning to Love Recessions," global consulting firm McKinsey & Co. studied 1000 business from 1982 to 1999 with the goal of understanding the tactics employed by those that grew stronger during an economic downturn.
While much of their report focused on M&A activity, there was one key finding that should give pause to corporate budget-cutters. McKinsey found that successful companies actually increased their advertising during slow times. No doubt these businesses recognized that stepping up their marketing while their competitors may be retreating provided tremendous opportunities to gain share.
The reality is that some companies will heed this advice -- and probably reap considerable benefits in the years ahead -- but many more will be forced to make tough advertising decisions. Christopher Vollmer, the head of Booz & Company's North American media practice, recently said these businesses should focus their marketing online. "Marketers are looking for advertising environments that are targeted, accountable and interactive -- all of those dimensions continue to benefit online," he commented. And he added that the current environment will lead marketers away from advertising networks, because "they offer little additional value in the form of campaign optimization or targeting."
Indeed, there is good reason to believe that the economic downturn will cause marketers to seek a flight to accountability and quality. Trusted, professionally developed online media sites, offering premium audiences, quality content and a history of delivering results, have the potential to become even more valuable as marketing budgets come under pressure.
Consumers have been embarking on a flight to quality for years, and even more so recently. When the news and information matters -- from plotting a travel destination, to staying on top of local and national breaking news, to understanding the world's financial condition -- it is the well-known, high quality content sites that are most trusted. In a recent study by TNS, 38% of consumers say they trust online news sites, while only 9% express trust in blogs. Jupiter found a similar result in its latest research on the environments consumers trust online. Well-known online media sites lead all others when consumers are researching products.
Given this consumer trust in well-known news and information sites, it's not surprising that, in a year in which dramatic political and economic news has dominated our lives, these sites have seen remarkable growth.
Nielsen Online recently reported that newspaper sites, such as NYTimes.com and washingtonpost.com, received a record 68.3 million unique visitors in the third quarter, an increase of 15.8% over the third quarter of 2007. Average monthly page views were up 25.2% over the year-ago quarter to 10.5 billion. The actual day of the election was a record breaker for professional news sites: MSNBC.com, CNN.com, ABCNews.com and the LATimes.com reported their highest single traffic day ever on Nov. 4.
If Vollmer is correct and the economic downturn is driving demand for accountability and premium, targeted audiences, then advertisers will follow consumers into high quality content sites. And there is growing evidence that, in doing so, they will see even stronger return on their investment. "
The report gives more focus to creating great local news content on your interactive property, but it also reinforces using the EFS Generator and being able to show your ROI for every dollar that is spent by your client. Yes, Interactive is very measurable, but so is broadcast with the correct information and simple tracking methods.
Recently I had an e-mail come to me from one of our clients, Leo Brown, the Manager of Real Life Radio 1380, in Lexington, Kentucky who had used a questioning technique that I thought really got to the core of Return On Investment when a client just won't give you a budget number when going through a Customer Marketing Profile (CMP)...
" I have been refining the CMP to get a stronger verbal commitment during the wrap up and here's what I came up with. So far my experience has been that few people are really going to give you solid budget info in the CMP, so I thought we could quantify the budget from the average sale price. For instance, say you have a car lot with a $12,000 average sale. If I closed the CMP with the question. "What if for a quarter of your average sale price a month I could show you how to get a 20% return on your advertising investment? Wouldn't that be something you'd be willing to put on the air immediately?" I think that way we get the budget quantified and we get the verbal commitment all with an emotional connection that shows how reasonable and rational it can be."
Something can be learned from Leo's questioning technique and being able to justify the advertising spend based upon having the right information and presenting a solution back to the client. Don't be afraid to ask the questions, the answers may surprise you.
