Advertising During a Recession

Last Updated Jan 31, 2008 6:42 PM EST

What should marketers in a flat lining economy do? It's clear that consumers are going to be watching their warecession hot dogllets a bit closer, and advertisers will have to try harder to pry pocketbooks back open in order to justify their budgets.

On Monday, the Times ran a story on how marketers are quickly moving to capitalize on consumer worry. Wal-Mart went back to focusing on Every Day Low Prices with the slogan, "Save money. Live better," and became one of the few retailers to post growth in the holiday season. Nissan has taken to hyping the Altima's miles per gallon over style or performance. But Avi Dan at Ad Age points out in his tips to CMOs that focusing on price for a campaign can have short-term benefits and long-term drawbacks. "Reliance on price incentives as a marketing tool is dangerous -- it devalues the brand, and it's hard to wean consumers off it."

CEO Drew Reisser of marketing consulting group Renegade offers sound advice to MediaPost on what marketers can do during a recession:

  • Focus on advertising with clear and proven return on investment, such as Internet and promotional advertising.
  • Be prepared to cut budget bloaters like trade shows, which have a harder time proving ROI.
  • Focus on a brand's core base, instead of going after more expensive new customers
  • If a brand has made its bones on humor, don't be quick to change that. "Acknowledging bad times might feel right, particularly if a recession is protracted, but consumers may not want to be reminded of that fact. And a little entertainment can go a long way, Neisser says. 'If humor was right for your brand in good times, it's even more right for your brand in bad,' he says."
Online advertising could be one bright spot, with a bevy of news sources declaring that Google, and by extension Internet advertising, seems to resilient to economic downturns. The Times UK expects online advertising growth to perhaps slow down, but not even begin to touch the depths of the 2000 crash, while Wired News declares Google may be recession proof, comparing their AdWords program to direct mail:
"We looked at all the past recessions from 1950 on and we found that direct mail -- Google's most direct predecessor -- actually grew during six recessions," Cowen and Company's Friedland says. "Given the current environment, there's no reason to think Google will outperform. But there's no reason to think it will underperform."
Thinking that Internet advertising will be the industry's savior is a bit rosy, however. While Internet ad spending is growing incredibly rapidly, it's forecasted to slow to 30 percent in 2008, and it still makes up less than 10 percent of total ad spending. In the end, satire site Wallstrip may have it right: the best way to make it through a recession is sex, guns, booze, and gambling. (Image of the killer deal at Gray's Papaya from flickr user aturkus, CC 2.0)