Each month we pose a question to the brilliant Peter Houston, co-host of the Media Voices podcast, who will answer in his fabulously inimitable way. This month’s question comes from Christy Page, Sponsorship & Operations Director for Mequoda Publishing Network.
Housty, we have a problem
How do you continue to grow marketing campaigns in an economy where most seem to be slowing down?
If I had the formula for this question, I’d be writing this somewhere a lot sunnier.
When times are tough, one of the first things to go are marketing budgets. This time last year I was reporting on the likelihood of 2023 being a ‘Car Crash’ year for advertising; the bottom line for marketers was being heavily shaded by inflation.
In the second half of 2023, I’m not sure if it’s been a car crash, but it’s definitely been a bumpy ride. Rising prices dent consumer confidence and their negative sentiment is a sign to cut promotional spending.
However, rather than accept the inevitability of an advertising slowdown, publishers can point out the benefits of maintaining ad spending through what feels like a recession even if the economists say it isn’t yet.
During the advertising slowdown in 2009, Sir Martin Sorrell encouraged brands to maintain their marketing spend. His belief was that companies that continued to invest through the downturn would win market share from their non-spending competitors.
The data appears to back Mr Sorell’s approach. A study conducted in 2021 found that stopping advertising had a ‘devastating effect’ on sales, pushing them down over time:
- -16% after one year
- -58% after five years
- -71% after nine years
The opposite is true for companies that have grown by continuing to advertise during times of recession.
Kellogs built its market-leading breakfast cereal position by doubling its marketing spend during the Great Depression. In the 90s, when Mcdonalds cut its advertising, Taco Bell and Pizza Hut both gained market share by keeping their ad budgets consistent.
* McDonalds learned its lesson and was one of the few companies that grew during the 2008 recession.
Of course, telling clients to spend more when times are tough, might not go down too well. Acknowledge how hard business is at the moment and try to show that you’re working to provide as much value as possible.
- Offering extras will win brownie points. If you have unsold digital inventory, offer it to advertisers that commit to series bookings.
- Look at your pricing strategies to see where you can create advertising or sponsorship bundles. Selling across your portfolio can also help you increase client spend and deliver added value.
- New products are also a great way to grow your share of client budgets. With launches you can also offer launch discounts if clients buy in for longer periods.
With some clients you may need to accept that they just don’t have the budget to grow their campaigns, or even that they will be cutting their spend. But it’s as important to speak with these clients as those that have money to invest.
I spoke with Jemima Villanueva, VP of international partnerships at The Atlantic, for the Jerry Maguire issue of the Grub Street Journal. She told me that reaching out to clients and prospects is never a waste of time.
“You’ve got to drop in a few bits and pieces along the way to pique their interest. You’ve just got to be in the right place in their mental filing cabinet so that, when the time is right, they’ll be like, ‘Oh, I know…”
Peter Houston is one third of the Media Voices podcast, a magazine publishing consultant and trainer, freelance writer, and co-publisher of The Grub Street Journal, a magazine for people who make magazines.