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Why A Digital Marketing Budget Makes Sense in a Recession (The biggest risk is to not to take a risk at all)

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Most marketers today are lamenting how difficult it is to keep their brands afloat during these recessionary times.

The conversation often turns to depressionary clichés like “flat is the new growth” and the use of a “pacing” of brand investment and marketing spend as a primary coping strategy. To say most marketers are being risk-averse is an understatement.

One of my favorite, and sincerest, pieces of advice to clients is that it’s riskier not to take a risk. But is this sage advice in a recession? Should they be playing it safe, as many marketers are? After all, wasn’t it a zealous pursuit of risk that got us all into this financial mess?

I’ve spent a great deal of time pondering this and I truly feel that a recession is the best time for marketers to not play it safe, to be aggressive, and yes, to take risks. Recessions create ripe opportunities for marketers to steal share and customers. And many of the world’s largest marketers are turning the recession into an opportunity with digital marketing methods.

• P&G bought the Art of Shaving to further solidify its market leadership of the Gillette brand and as a platform to expand share in the higher end male grooming category.
• Toys ‘R’ Us bought FAO Schwarz in order to secure some iconic retail locations, not to mention a venerable brand in the hearts of kids.
• And Fiat certainly got a bargain in Chrysler and finally has a viable entry into the U.S. auto market.

Marketers aren’t limiting this aggressive spending to just M&A activity. Recently, Microsoft CEO Steve Ballmer said the company is willing to invest up to 10% of its operating income on its Internet search business for up to five years. The launch of Bing during the NBA playoffs was hard to miss, and Ballmer believes he can “get an economic return” on this spending.

Walmart, buoyed by a market predisposed to needing to sample its brand, showed a 16% increase in U.S. ad spend, and they’ve seen same-store sales growth of 2% to 3%. Though tepid compared to prior growth rates, those rates are stratospheric when you consider that most retailers are looking at double-digit declines in same-store sales.

To be fair, these recessionary profiteers are some of the largest advertisers in world. So can their spending practices be emulated? Maybe not the scale of the spend, but the aggressive posture can be. Here are five pragmatic ways to manage your marketing budget in a recession:

1. Prioritize your marketing spending by the likely return on objective (ROO)
I’ve intentionally said “return on objective” versus “return on investment.” I advocate a singular focus on over-supporting one key objective for the upcoming marketing calendar. Rank your marketing activities based on likely ROO and maximize support for the activity that is most likely to pay off first. For a brand like Hulu, it’s all about awareness, so despite being an
Internet brand the company has prioritized its spending investment in TV due to its ability to (still) deliver a scale audience. Hulu is focused on brand exposure rather than content experience in its marketing strategy, and its spending choices reflect that.

2. Don’t throw the discretionary budget line away
Soft media rates and decreased inventory demand equal opportunity to mitigate advertising spending while increasing your share of voice. Maintaining a discretionary line item should put you in a position to take advantage of opportunistic situations, especially in a world where media is on deep discount. During a recent earnings call, Walmart vice chairman Eduardo

Castro-Wright said the retailer “reduced advertising costs by more than 20% through more efficient media buying and a precise focus on message.” Yet he said Walmart’s share of voice increased by 67% year over year. Much is available to the marketer who holds something in reserve and can operate nimbly when a media bargain presents itself.

3. Own something
If you can’t outshout your competition in a given media space, let them have it. Own your own space and put your distinct mark on it. Whether it’s ambient, radio or digital, say it loud and say it proud. If you can’t be the voice leader in your category, you might still be able to be the loudest speaker in a specific medium. And if you dissect your category tendencies, you’ll likely find that you’re over-invested in residual media while emergent media are available for domination.

4. Create conversation capital and turn your advocate media on
The largest new media space is the highly public voice of the consumer. If you have advocates, as evidenced by high customer satisfaction rates or a large pool of net promoters, then your primary marketing objective ought to be empowering them to distribute your message and endorse your brand. Let them know they are a critical component of your success and reward them for their support. President Obama (arguably the marketer of the year, if not the decade) told his supporters first who his VP candidate was via text message. In turn, how many text messages do you think his supporters sent out spreading the news? Millions.

You should also add the measure of buzz-worthiness to your marketing review criteria. Ideas and campaigns that capture the imagination of consumers and the press have a higher likelihood of being talked about online and offline. So whatever you do, do something worth talking about and it’ll get talked about.

5. Optimize all your assets to market your brand

Expand the definition of what media can mean: your employees, their cars, your trucks, your product, your buildings, your partnerships, your packaging. As you evaluate your marketing plans, a component of them should include “own brand media.” Zappos has 500 employees who tweet. Burger King recognizes that the wrapper of a Whopper creates more brand impressions than most TV shows. Ask yourself if this real estate is being used to optimally extend your message. Necessity is the mother of invention, and one of these “own brand media” may be the key to keeping your brand in the consumer conversation.

Always remember, it’s the quality of the engagement that really counts. Take social media. The fact that a single YouTube video can have more impressions than an Oscar telecast is pretty powerful. Many marketers are still trying to figure out how to deploy their brands into these social arteries.

What seems to be getting lost in all of this is that it doesn’t matter how much you put out there, or what digital mediums you use or, for that matter, how much you spend.

What matters is how much people engage with it.

My seven-year-old can post a video on YouTube. The question isn’t are people seeing it, but are people following, rating and sharing it; are they “friends” or even “fans”? Cadbury’s “Gorilla” ad received 3.5 million YouTube views. Impressive. More impressive is that it is one of the most discussed pieces of online content of all time, and it’s spurred thousands of consumer-created spoofs. Its real value is its talkability.

So ask yourself, is the content your brand is creating worth engaging in and talking about?

Yes, when thinking about your marketing spend during a recession and, more important, about your marketing content, the biggest risk is to not take a risk at all.


One thought on “Why A Digital Marketing Budget Makes Sense in a Recession (The biggest risk is to not to take a risk at all)

  1. “Rank your marketing activities based on likely ROO and maximize support for the activity that is most likely to pay off first.”

    Excellent suggestion! You might like my post on developing a marketing budget and I’d love to hear your thoughts!


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