PMTvoice

The first 13 years of my “professional” life were spent in the broadcasting industry.  I worked for an AM station that was mostly talk oriented, a FM Christian Adult Contemporary station, and also a FM Christian rock station.  One of the major things I observed throughout my career in radio was that businesses often would cut back their advertising dollars during “challenging” economic times.

This was the absolute worst thing they could have done.

The general thinking in tough economic times like we’re facing right now is for business owners and decision makers to cut back on their marketing and advertising budget.  What does this actually accomplish though in the long term?  Sure, you may save some dollars in the short term, but in the long term fewer people will hear about you.  When fewer people hear about you, sales will begin to slip, and then budgets get even tighter.  More advertising is cut, and the cycle gets more and more vicious. 

I read a great article here that mentioned a concrete example of the traditional thinking on advertising in tough economic times.  The article mentioned this:  “When Netflix began making serious inroads into Blockbuster’s customer base in 2005, Blockbuster cut its $154.2 million advertising budget to $44.7 million. No surprise that Netflix grew from 4.2 million subscribers then to 7.1 million now. How’d the ad cut work for Blockbuster? In 2007, they closed 500 stores and saw a $33.4 million profit turn into a $125 million loss through the third quarter.”

If you’re a business decision maker or owner, I’d strongly encourage you to consider the ramifications of cutting marketing and advertising on your long term business plan. 

1.  Will such an action truly help your organization weather temporary economic times?

2. What could you potentially gain by continuing to aggressively advertise while competitors are tempted to cut their own budgets?

3. What will customers think about your business if you say less and less about yourself in the marketplace? Will this instill confidence in them?

Some things to chew on.  Times like these can be either devastating, or they can be explosive opportunities!  Be sure to take the time to carefully think about your advertising plan before making drastic changes!