Reducing a brand’s marketing budget during an economic downturn tends to be a mistake. Numerous case studies have shown that brands who reduce advertising spend during times of economic contraction lose custom not just during the downturn but during the subsequent recovery as well. Meanwhile, brands who increase their marketing budgets tend to perform better both during and after the downturn, with their increased share of voice and brand recognition leading to increased market share.
A Lesson from History
An excellent example illustrating this dynamic was the rise of Kellogg's during the Great Depression of the late 1920’s and early 1930’s. Kellogg’s is a household name today, but prior to the Great Depression the brand was in fierce competition with a rival cereal brand called Post. During the Depression, Post made the mistake of cutting their advertising budget, while Kellogg’s doubled their budget and invested heavily in radio advertising.
The result was inevitable. By the end of the Great Depression, Kellogg’s had become the dominant brand in the packaged cereal market - a position it retains today, almost 100 years later.
The rise of Kellogg’s during and after the Great Depression did not happen by mistake. By taking advantage of their rival’s reduced share of voice, Kellogg’s was able to saturate the media space with their own advertising and ensure that consumers were far more familiar with their cereal brand than any other. And in difficult times, people tend to turn to the familiar.
Brand Recognition is King
Kellogg’s decision to invest heavily in radio advertising in the Depression was a deliberate choice designed to maximise the scale and reach of their brand messaging, and increase brand recall among their customer base. This meant that when hard-pressed consumers did purchase cereal, they opted for Kellogg’s, the familiar brand, rather than risk their money on a competitor.
This is a clear demonstration of the consumer mindset during an economic downturn. When people are tightening their belts, they perceive every purchase as a risk. The safe bet of a familiar brand is preferable to taking a chance - and potentially wasting money - on an unknown brand.
Adopting a Long-term Mindset
In the 2020’s, most brands are aware of the need to maintain their advertising budget during economic downturns. However, what many still do not understand is that where and how the advertising budget is spent is as important as the budget itself.
During a downturn it’s important to focus on empathetic brand messaging and prioritise existing customers. In difficult times, hammering your customers with hard-sell messaging is likely to turn them away from your brand rather than retain them.
Ensuring customers recognise and identify with the brand is the key to a successful advertising campaign during an economic contraction. Even if some of your existing customer base stops spending with your brand during the downturn, they are far more likely to return later if you have maintained an effective presence in the media spaces they often visit.
Kaizen Can Help
In the Great Depression Kellogg’s used radio advertising to communicate their brand message to large numbers of people and stick in the minds of their existing customers. However, in the age of the internet there are many other, often more affordable and targeted, media strategies available which can maximise the scale and reach of your brand messaging. Chief among these is programmatic advertising.
Programmatic advertising was originally developed as a safe way for advertisers to purchase media space on websites, allowing their ads to reach vast numbers of previously inaccessible pairs of eyes around the world. Today, programmatic has radically evolved to allow delivery of digital ads in a whole host of additional media spaces, including Connected TV, Digital Out of Home, and audio streaming services.
At equimedia, our programmatic offering is called Kaizen. Kaizen isn’t just about scale. We use sophisticated targeting strategies to place ads in front of the right people, using a combination of detailed campaign structuring, frequency management, and deterministic and probabilistic targeting. Creative messages can be tailored based on the audience profile, creating a more personal tone that is perfect for generating brand recall when it matters most.
Kaizen also excels at delivering ads exclusively to your existing customers. We can use first-party data to create audiences of people who have visited your website or given you their contact details. We can set up audiences that filter out the people who have ‘bounced’ away from your website, ensuring your media budget is spent as efficiently as possible, or we can target audiences of users who have completed certain actions, like purchases or product views, to allow for highly tailored messaging.
Programmatic advertising is the perfect strategy for keeping consumers familiar and comfortable with your brand in difficult times, capable of massive scale and reach as well as audience retargeting and highly customisable messaging. If your brand is not taking advantage of it today, then you are already missing out.
If you would like to discuss how you could use Kaizen programmatic advertising to increase your reach and brand recall, please get in touch.
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| Author | Ed Perry |
| Channel | Media |