“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”- Peter Drucker~Modern Business Mastermind.
As brands are considering the ways to use marketing during this unprecedented time, either as a way to drive viewers to their websites or build and maintain prolonged awareness, there is historical evidence of the value of staying on-air during economic downturns.
The Great Depression (1929-1933): Often identified as the worst economic collapse the United States has ever endured, consumer products industry was hit especially hard.
Rivals Kellogg’s and Post would go on to make decisions that would affect growth trajectories for generations. Things were as bleak as they are right now. In fact, many are saying it will be worse than the Great Depression. Economist are predicting unemployment will get as high as 31% (it was 24% during that time). According to a 2009 New Yorker story , in response to the depression, Post cut its advertising budget, while Kellogg’s took the opportunity to double down on their spend, while launching a new product ‘ Rice Krispies” The results surprised industry analysts as Kellogg’s reported a 30% increase in profit; overtaking Post in market share and eventually became the industry leader as a direct response to their investments in marketing and product innovation.Kellogg won during the Great Depression, while everyone else (including their competitors) failed.
The Great Recession (2008-2009) A clear example can be seen in the Automobile industry. While most manufacturers cut marketing budgets, Hyundai rolled out a new advertising campaign focusing on their new “Assurance” program. Investing in digital advertising and broadcast securing 9 TV commercial placement.
The Recession (1990-1991), McDonald’s cut ad spending, while Taco Bell and Pizza Hut stayed active. Taco Bell and Pizza Hut took advantage of this opportunity by pushing aggressive marketing campaigns. Forbes reports that Taco Bell’s sales jumped by 40% and Pizza Hut’s by 61%. In comparison McDonald’s sales shrank by nearly 30% during this downturn.
Multiple research studies from previous recessions substantiate that marketing spend during recessions have lasting, strategic impacts across all industries. Psychologically of brand consistency during uncertain times, points to an opportunity to gain brand loyalty. By being one of the constants in a world that is constantly changing, your audience will begin to associate brand attributes like stability, consistency, commitment and longevity to your brand.