In case you’ve been on vacation or living under a rock, let’s briefly review highlights of the most recent economic news. The stock market is challenged, once high-flying dot-coms are tanking, and consumer confidence is eroding faster than a seawall during a Pacific storm. Our one-time invincible and robust economy is slowing dramatically — enough so that the dreaded “R” word (recession, not recount) now looms over our collective head like a dark cloud.
Coincidently, this news emerges during what is for most companies the beginning of a new fiscal year, which means budgets. And based on the current economic trends, organizations are taking a good, long, hard look at budgets as they decide how to make or exceed their numbers in what looks like stormy weather over the next few years.
So what does all this have to do with marketing? Let’s face it: One of the first line items to be cut in tough times is the marketing budget. It sits there on the spreadsheet like a giant target — a pure expense with no profit directly attributed to it. To many bottom-line CEOs, cutting back the marketing budget is an easy decision that few will challenge (except, of course, the marketing people).
But if you’re savvy, marketing cuts by others could translate into opportunities for you. Specifically, if companies in your space are cutting back, it means that it’s a buyer’s market for marketing services, space sponsorships, and other once-unreachable marketing options; these may now be available — and at potentially better pricing.
Additionally (and for some reason I expect a lot of interesting response from this one), during tough economic times, you should maintain — yes, even increase — your marketing budget. While others cut back, you can dramatically increase both your share of voice in the marketplace and the ROI of your marketing efforts.
In that spirit, here are some opportunities to look for as you plan ahead:
Sponsorships. One of the first things to go from a budget are trade-show, conference, and special-event sponsorships, sometimes for highly desirable events. Back in my agency days, I had a high-profile client that was the founding sponsor of what became over many years a premier local event and an institution. During an economic downturn (and against our advice), the client left the sponsorship. The client’s top competitor moved in quickly, bought the sponsorship at half the cost, and to this day owns this major community event.
If there is an event (local or national) that you have always coveted but could not obtain because it wasn’t available, now is the time to see if an opportunity has opened up.
Remnant advertising. During economic slowdowns, ad rates at trade and consumer magazines become more flexible. It’s simple supply and demand. As people pull back budgets, publishers look to aggressively replace the lost revenue, especially if an advertiser had previously committed to purchasing the space. You can sometimes get national advertising at one-third the cost because a publisher needs to fill space that was vacated by an advertiser a few days before publication.
In one of my previous lives, I was able to do sustainable, long-term brand and product advertising in highly desirable national and trade magazines by purchasing remnant space. Opportunities exist in the same fashion for radio and TV. But they won’t come to you. You need to aggressively pursue them and let the ad reps at these media outlets know you are in the market for their remnant space.
Some caveats: Make sure the ad vehicle you choose is right for your audience (don’t use second- and third-tier audience vehicles); also, have plans to sustain the campaign with some level of predictability. One ad, and one ad only, is a waste of money.
Hiring an agency. This may be the time to finally hire that PR agency you’ve been thinking about. For the last couple of years, it’s been a real seller’s market for obtaining PR bandwidth (especially in areas of massive economic strength like Silicon Valley). Two years ago, we had to pitch to agencies to take our business rather than waiting for them to pitch to us to get it. It’s a buyer’s market again, with many agencies back on the street looking for solid business.
This is good for you for a couple of reasons. First, rates are now more negotiable — agencies have to keep their teams busy and bring in business. Second, fewer companies will be out there in the marketplace with a PR effort, and that means your voice may have a better chance of being heard. Oh, one other thing — they will really work hard for you because they need to keep the business.
For the truly competitive company, the emerging economic landscape can actually be good for business. But leveraging the current environment in order to gain on your competitors requires aggressive, bold, and creative thinking. One strategy is to kick marketing into gear, not kick it out. Good luck.