When times are good you should advertise, when times are bad you MUST advertise
It’s no secret that many businesses are doing it tough across Australia.
In the aftermath of the mining boom the Australian economy is certainly going through a difficult period and the tough times are set to continue for a little while yet, according to industry analyst and economic forecaster, BIS Shrapnel.
In the difficult times it’s often instinctive for businesses to tighten their purse strings and cut costs in areas such as marketing, advertising and research.
But this is not always the right choice. In fact businesses should really be doing the complete opposite, and history proves this to be true. The story of how cereal companies Post and Kellogg responded to the economic depression in the late 1920’s is a fantastic example.
Post did what a lot of companies tend to do; it slashed its research development and advertising costs. Kellogg did quite the unexpected. The company doubled its ad budget and promoted its new cereal, Rice Krispies. Even when the economy cratered in the early 1930s, Kellogg’s profits rose 30 per cent. Kellogg is now the industry’s dominant cereal company.
So what does this teach us? Cutting your advertising in bad times may make your figures look a bit better in the short term but it does nothing for the longevity of your business.
Invest in the future of your business and contact Pocket Books for economical, relevant and targeted advertising for your business.
To all of our new and existing customers:
Whether times are good or bad, or happy or sad…. let’s stay together. (Al Green, 1972)