Why making cuts in your spend on marketing is a waste of a good recession
ONE-in-four businesses see opportunities in a recession, and 70pc of these firms make progress for five years after a downturn.
Addressing the Association of Advertisers in Ireland on why CEOs are wrong to cut marketing budgets, Core Media boss Alan Cox (pictured) said research clearly shows reducing spend in bad times makes no sense.
Firms that keep up their ad spend see long-term dividends, while one in every three companies that make cuts will not regain lost market share and profit.
Cox said Irish marketers should urge their CEOs not to waste "a good recession". Ad spend swings more dramatically than gross domestic product in recessions and upturns.
Budgets in Ireland dropped by 42pc between 2007 and the end of last year, while GDP fell by ten points.
Media costs are down, creating growth opportunities for brand owners. Companies that slash budgets open doors for rivals to make gains. Firms must gear their business to take advantage for when the upturn comes -- which may not be too far off.
Recessions are always followed by expansions and prosperity. As long as there are no big surprises on the horizon, Ireland is about five years away from recovery. The worst is over and once Europe gets sorted, we should be OK. Marketers must be consistent with their spend, look overseas for ideas and upskill staff.
Learn from the large retailers as they know about advertising's power. Cox referred to a quote by Sam Walton, founder of the giant Walmart chain: "I was asked what I thought of the recession. I thought about it and decided not to take part."