The textbook definition of a recession is a period of declining economic performance across an entire economy, frequently measured as two consecutive quarters. In other words: it's a time when most Tampa Bay small business owners sell fewer of their goods and services.
There is one thing a recession is not. It is not a time for local business owners to stop advertising.
One of the greatest marketers of all time, Henry Ford, once said, "The man who stops advertising to save money is like the man who stops the clock to save time."
There are many examples of companies that have proven this aphorism to be true. Your bowl of cereal this morning could be one example.
The New Yorker magazine financial columnist James Surowiecki writes, “In the late nineteen-twenties, two companies—Kellogg and Post—dominated the market for packaged cereal. It was still a relatively new market: ready-to-eat cereal had been around for decades, but Americans didn’t see it as a real alternative to oatmeal or cream of wheat until the twenties.”
“So, when the Depression hit, no one knew what would happen to consumer demand. Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.)
“By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty percent, and it had become what it remains today: the industry’s dominant player.”
What you ate for lunch could also be an example of a company that thrived by advertising its way through a recession.
In a recent article in Forbes, media consultant Brad Adgate explains that "In the 1990-91 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%."
Many Tampa Bay business owners, unfortunately, do not have the financial resources of Kellogg's or Pizza Hut. So, it is inevitable that some advertising budgets may need to be trimmed or re-configured. For those companies, advertising on Tampa radio makes the best sense for several reasons.
According to Nielsen, one of the most potent components of a marketing campaign, as it relates to sales, is reach. This is the number of consumers who actually are exposed to an advertiser's message.
Reach, it turns out, is more powerful than targeting, branding, context, or recency.
Tampa radio, provides, by far, the largest reach of any local advertising medium. It reaches significantly more consumers than local TV, local newspaper, social media platforms like Facebook, or streaming audio sites like Pandora and Spotify.
More importantly, Radio's omnipresence is true among consumers of all ages, including generations X, Y, and Z; Millennials and Boomers. Everyone.
The other reason radio should play a primary role is during an economic downturn is the mediums well-documented return-on-investment (ROI).
Over the past few years, Nielsen has conducted over 20 studies to determine what type of ROI a business can expect from radio advertising. Although the results varied by industry, the average company generated $100 in sales for ever $10 invested.
The chart below shows the range of returns from each study.
AdAge, a trade magazine for advertising professionals, calls these types of return "eye-popping". The magazine goes on to say radio's ROI is superior to commercials on TV, online, and social media.
Local business owners have always known that they can expect impressive returns-on-investment when advertising on Tampa radio stations.
Michael Hollander and his family own Weather Tite Windows in Tampa. When he took over the company in 2006, it was deeply in debt and nearly out of business.
Since then, Mr. Hollander has built Weather Tite into the 24th largest home improvement company in America. Quite an amazing feat for a company that only sells replacement windows and doors.
"Advertising on Tampa Bay radio has been a huge part of the company's success," says Mr. Hollander. "Ninety-two percent of our leads say radio is the way they heard about us. The leads we generate from our radio ads cost us $4.00 each. That's almost half of what I pay for leads from other sources."
"Advertising on Tampa Bay radio works because every day, consumers drive to work at the same time listening to the radio. They listen again at the same time every afternoon picking up their kids from school. This makes it possible to hit the same people repeatedly with our message."
On Tampa Bay radio, I discovered, I could affordably purchase enough frequency to really have our brand sink into our target customers' heads," Mr. Hollander says.
What does Mr. Hollander receive from his investment in frequency? According to his in-depth lead tracking process, for every $1 he invests in radio advertising, he gets a $21 return on investment.
Advertising During Downturns Has Extraordinary Value
A study published by WARC determined that increasing advertising during a downturn has extraordinary long term value for any business.
According to the study, "those advertisers who increase spending, whether modestly or aggressively, achieve greater market share gains than those who cut their advertising investment. This, in turn, puts them in a better position to increase profits after the recession.
One can hope that the next recession will be slight. But hope will not guarantee a Tampa Bay small business owner's ability to survive or even thrive during a downturn. Advertising can be a lifeline.
More Advertising Advice For Tampa Bay Small Business Owners
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