There is only one way to grow when the market starts tanking:
Grab more market share.
And to do that, you need to boost your Share of Mind.
Now, you can accomplish some of that with better advertising.
But not without either maintaining or increasing Share of Voice.
Basically, you need to hold steady on your mass media branding spend, or even to increase your branding spend during down market periods.
This means doing the hard thing and investing in the long-term when you’re under intense pressure to put all your time and budget toward the immediate short-term.
Let no one pretend otherwise: staying the course with your long-term branding (or launching a branding campaign) requires guts as well as brains.
But it IS the road to growth during down markets.
What Happens If You Stop Your Ad Spend?
On the other hand, cutting your brand building during down markets can be catastrophic:
- And a year’s break from branding resulted in an average drop of 16% in sales revenue.
- When media efforts resume, it can take 3-5 years to recover the resulting equity losses.
So while nobody would say that holding your branding spending steady (or increasing it) is easy — the data clearly says that it is, in fact, the least painful course of action in a down market.
It’s also the path to leap-frogging your competition when the market picks back up.
Story Time: McDonald’s Learns Their Lesson
In response to the 1990 recession McDonald’s cut ad spend, killing their share of voice.
Meanwhile, Taco Bell and Pizza Hut continued to aggressively advertise throughout the recession.
Once the economy bounced back, here’s what happened:
- Pizza Hut’s sales grew 61%,
- Taco Bell’s revenue increased 40%,
- and McDonald’s sales declined by 28%.
So when the 2008 recession hit, McDonald’s had learned their lesson and continued spending on their “I’m Loving It” branding.
As a result, McD’s grew in 2008, opening 600 additional stores during the year.
And if you’re thinking “but that’s fast food,” understand that there are scores of case studies that repeat this pattern for any industry or vertical you care to name.
It’s why Burberry’s legendary CEO, Angela Ahrendts is widely quoted for her quip to “Never waste a good recession.”
Which Way for Your Brand?
So if 2023 didn’t shape up as well as you’d want, and you’re now staring down the barrel of 2024, trying to figure out a plan of attack…
Make sure you budget for brand building.
And while you’re at it, make sure the ads you’re paying to put on the air will maximize your share of mind and market.