Now’s Not The Time To Cut Back On Marketing. Here’s What To Do Instead
I know what you are going to think when I say this, but don’t cut your marketing.
I get it — business has not yet fully rebounded, costs have gone up, the labor market is tight, inflation is eroding spending power, and the latest Covid variant is adding even more uncertainty into the mix. Slim margins have gotten thinner. Cutting marketing is an easy choice. But don’t.
Why Cutting Ad Spend is Dangerous
For many consumer product categories — whether it be apparel or electronics or even dining out, the sales cycle is not a question of days or even weeks but months. Your customer may have walked into your store today, but the consideration of that decision may actually have begun months ago, with the consumer just finding the right time and opportunity to act upon it.
A tiny percentage of marketing and advertising has next-day turn-around impact. Even sales promotions, with special savings offered in the coming week, still require an existing predisposition to your business on the part of the consumer for a conversion to take place. The sales promotion only works as a last-mile type of incentive. The consumer has to be already interested in buying from you for it to work.
Consider, for example, auto dealers. The sales cycle in that industry is currently 90 days out but may actually begin months in advance of that. So, if you are an auto dealer, marketing and advertising really only begins to bear fruit after engaging with that consumer over most of the preceding year.
Businesses that withdraw from marketplace visibility have a much harder time, and find it far more expensive in the long run, to regain customers once they start re-engaging, with market share declining even after they resume advertising. So, while cutting back marketing spend can help address some short-term bottom-line issues, it will create significant challenges to long-term sustainability.
And of course, disappearing from the market now can have major implications for the holiday sales season, which is almost upon us, especially as the consumer considers transitioning to even more digital buying.
How to maximize ad spend efficiency
Instead of pulling back, think creatively about how to maximize the dollars you do have so that you can produce the greatest return.
- Stay visible in the community. Advertising can produce reach, but being in those places that are important to your customer can produce greater relevance, retention, and meaning to your customers. Support local causes and initiatives. Sponsor community groups. Be a part of civic and community board meetings. Meet people and shake hands. Use your location to help advance fundraising and take advantage of awareness building via nonprofits of importance to your customers.
- Use your ad budget more effectively. Facebook or Google ads might seem like the most cost-efficient choice for your ad budget, but don’t discount the impact and value of local broadcast. The CPM for some local TV markets is about $5 for a 30-second ad. For radio, the average daytime CPM rate is typically in the $12 to $16 range for adults between 18 and 49. As the goal here is to remain visible in the market, you don’t need high levels of frequency. Look to simply get messages of support out to the community on a semi-regular basis. Most local TV or radio stations can even help you with simple creative to get the message out.
- Partner with local print. Local newspapers and you share the same goal. You both want to support your community and know that local media and businesses are vital to that mission. Contact local publishers to see how you might work together. Perhaps offer a “meet your local reporter/publisher day” from your location. Join together to support a cause. Offer to provide free copies of your local paper for a week from your location in exchange for an ad to help promote local media.
- Take a look at your content strategy. It’s tempting to use social media posts as a vehicle for promotion. But is that the most relevant content to your customers to keep them engaged? Consider producing content on topics of greater importance to your customers as a means of underscoring your importance to the community. Perhaps start a series of recollections from customers on the history of the block you are on or the local community. Highlight the stories of customers who are doing good work or have interesting backgrounds. Use your location to invite customers to submit ideas.
With margins tight, it is tempting to target discretionary spend. But marketing and advertising is an investment that produces both short-term and long-term returns. It is vital, especially now when so much uncertainty exists, that you let customers know you are there for them and helping the community weather challenges.
Doing so will put you in the best position to keep sales flowing now and reap the rewards as conditions improve.
Jeff Greenfield is SVP, Buyside, at WideOrbit.