Nathan is the CEO of Simple Story, a video marketing agency that has worked with brands from around the world to help tell their story.
For months, COVID-19 has been sweeping through the world, upsetting local, national and international commerce, bringing many businesses and industries to a complete standstill. Even more, businesses have been severely affected with reduced workforces, customers, prospects and revenue.
During times of uncertainty, we all have a tendency to reduce as much risk as possible. We want as much predictability within our businesses to counterbalance the unpredictability of the environments our businesses operate in.
What Do I Cut?
The most common form of risk mitigation is to cut back on expenses, which makes complete sense. If you fear that the money coming in is going to slow down, you want to slow down the rate at which your money is going out. But the problem is what gets classified as expendable. What expenses are you willing to cut?
I have spent the entirety of my career working in or around marketing teams, and time and time again, marketing is seen as expendable within an organization.
Many startups will delay their first marketing hire, prioritizing other operational functions. And even then, they will not support this function with adequate budgets, authority or strategic involvement within the organization to truly be effective.
Within larger companies, I have seen marketing be treated as an afterthought. Once decisions have been made, marketing is then brought in to communicate it to the world.
With a pervasive culture that devalues and undermines the role of marketing within an organization, it should come as no surprise that one of the first areas businesses will cut back on when hard times come is marketing.
A Case For Marketing
There is no doubt that businesses across the board are experiencing hard times. But big problems always create even bigger opportunities. No, that is not the eternal optimist in me speaking; it is the data scientist. The Advertising Specialty Institute has pulled together 100 years of indicators that all point to the same conclusion: During tough economic periods, a business’s best course of action is to double down on marketing and advertising.
• In 1927, Harvard Business Review uncovered that companies that maintained their investment in branding and marketing through the Great Depression came out 20% ahead of how they went into the recession.
• Buchen Advertising uncovered that companies that cut advertising during the 1949, 1954, 1958 and 1961 recessions all lagged in sales and profits behind those that did not.
• McGraw Hill Research studied 600 B2B companies in the 1980s and found that those that doubled down on building their brand and advertising grew 275% more than those that did not.
• Cahners Publishing Company found that advertising during a recession leads to, on average, a 1.5x increase in market share. But more interestingly, during economic boom periods, they saw that 80% of businesses invested in advertising, but saw little to no movement in market share.
• Finally, a MarketSense study found that investing in both long-term brand-building and short-term performance programs saw the best results during a recession.
This crisis is the worst time to cut back on your marketing efforts. We are all being inundated right now with content from every corner of the internet. If you are not participating at all, your prospects will likely begin to forget about you. Now is the time to remind people of not only your values but the value you bring. Plus, think of it this way: if your competitors are still advertising, they are going to leave you in the dust. If they are not, this is your opportunity to truly differentiate and dominate your market.
According to wordstream, online advertising has dropped during the COVID-19 outbreak, reducing the competition for keywords and lowering the price to advertise against them. The data not only proves that you should be advertising, but Google has actually made it cheaper for you to do so.
Additionally, since this pandemic has forced so many of us to stay home, it has had a profound impact on the amount of media we consume on a daily basis. Among millennials and Gen Z, online video consumption has increased an average of 48%. Meanwhile, Gen X and older generations have increased broadcast video consumption by 44%.
Your audience is ready to listen.
I can hear what some of you are thinking right now; your heart is willing, but your cash flow is weak. And I truly sympathize, but you need to rewire your thinking and learn to view marketing as much as a non-negotiable as making sure your office has internet, or your product is market-ready, or that your yearly taxes are filed. It is not a nice-to-have; it is a necessary cost of doing business.
The road ahead of us is going to be hard, no doubt about it, but we will prevail. COVID-19 has thrown us a curveball and presented some unique challenges, but the underlying framework of how we should respond to economic downturns is the same.
I will leave off with a quote from William H. Hastie, who once said, “History informs us of past mistakes from which we can learn without repeating them. It also inspires us and gives confidence and hope bred of victories already won.”