As everyone is well aware, we are in uncharted territory. COVID-19 has created a wave of fear and uncertainty. People are either falling ill or self-isolating and closing their doors to the outside world. But what about businesses?
According to the Australian Bureau of Statistics, two thirds, or 66 per cent of Australian businesses, reported a reduction in their turnover or cash flow as a result of COVID-19. Many businesses deemed “non-essential” by the government have been forced to either temporarily close, or change the way they operate to comply with regulations.
While it’s a largely grey and cloudy time, there is one silver lining according to marketing expert Mark Ritson and that is: marketing agencies have the chance to rise up and showcase their strategies to continue taking care of their clients.
Although, only smart marketers grab this chance and use it to theirs and their clients’ advantage.
Earlier this week, in the West Australian, Mark gave his insights into the afterlife of COVID-19. Where are we headed? Well, once global lockdown is over, we’ll most likely enter a recession.
While COVID-19 is certainly a bridge not yet crossed, the world has lived through many recessions. Smart marketers know how advertising and sales are generally impacted during and after a recession happens. But, Mr. Ritson sheds light on the fact that not all marketing companies are the same in their response to these dimming times.
There are two types of marketers. The first responds to declining sales by “slashing their marketing and advertising spend” and waits for things to blow over.
What’s wrong with this, you may ask? Well, while most advertisers cut their budgets during recessions, a smart marketer would use this to their advantage. Don’t wait until a recession is over to build your brand and raise your voice!
The second marketer understands this. They recognise the importance of both short-term and long-term advertising to, not only make sales and build their client’s brand, but to ride the wave and endure these questionable times.
The more a brand chooses to spend on advertising compared to their competitors is how they’ll grow. Experts call this “excess share of voice” or ESOV.
Essentially, if a brand has a 20 per cent share of the market but a 30 per cent share of the voice, it has an ESOV of more than 10. It has been proven that brands with a positive ESOV are capable of growing its market share to match its market voice.
Unfortunately at this rate, we will see a lot of businesses go bankrupt and close permanently. While it definitely isn’t the sole reason nor a refusal to mould to new techniques, some businesses just aren’t aware of the importance an advertising investment can have on keeping your brand alive.
This isn’t speculation, history has shown that brands have benefitted from upping their budget during periods of recession. For example, Procter & Gamble, founded in 1837, has maintained a long withstanding presence by betting on times like these.
After the global financial crisis in 2007-08, the consumer goods company upped its advertising budget by seven per cent. Now, not all companies will have the money available to spend and for those, it might just be a situation of staying afloat.
But, you know that second marketer I mentioned? They’re the rare ones who’ll either maintain or, better yet, increase their budget and do more than survive these trying times. Once it’s over (and it will be over) they’ll be rewarded with an increased market share and an ever-growing online presence.
If you have a subscription to Press Reader, click here to read Mr. Ritson’s full article ‘Smart Marketers Will Spend’.