Article Written by Katina Jaye Beveridge, ASBAS Advisor, Western Sydney Business Centre.
Based on recent research from the World Federation of Advertisers (WFA), 90% of major global brands are cutting down on their ad spend for at least six months, but is this the right step?
The pandemic affected all businesses, large and small, around the world, and their instinct is to cut down on expenses to save money. As the industry struggles with the possibility of an ad recession, ad budgets are expected to drop by 36% in the first half of the year and 31% for the entire year.
Skimping on ad expenses during the pandemic seems to be the logical move, however it can be detrimental to your business growth. Only a small percentage of businesses are taking the ‘seize the opportunity’ approach and continue to invest more in marketing. And this decision is more due to instinct than an actual strategy.
Why should businesses invest more during a crisis?
- Marketing plays a critical role in retaining customers and building brand value. It is a good opportunity to reach out to your target market and engage with your customers. You also need to constantly communicate with your existing customers to improve brand loyalty.
- Marketing during pandemic positions you as the top-of-mind brand. Being in front of your potential customers, even during slow seasons, does not mean that you’re wasting money. In fact, it is a good chance to introduce your brand and reinforce your online presence since most businesses are laying low. When your customers are ready to purchase, you will definitely be their first option.
- Marketing ensures business survival. This is because you continue to reach out to potential customers and improve your reputation through marketing. Remember, your customers are your lifeline. You won’t be able to survive if you stop engaging with them.
You do not have to spend much when marketing during difficult times. Since the pandemic has hastened the digital transformation in most industries, businesses that continue to invest in marketing are exploring the advantages of digital platforms in advertising. For example, Google ads and social media are some of the popular ad channels. Not only are they effective, they also do not cost as much as traditional ad platforms.