A few weeks ago, our friends at ThinkTV released a great report called “What happens if I stop advertising?”.
The short answer is that cutting advertising can severely damage a brand’s market share, sales and profits. The long answer can be found here and below is ThinkTV’s summary:
Times are certainly tough. The word “unprecedented” is being used at an unprecedented rate and businesses are looking to cut expenses at worst, or heavily prune at best.
Advertising and media budgets are ripe for reduction; they can in theory at least, be paused at short notice and re-activated later. Marketers around the globe are all grappling with the same question “What happens if I stop advertising?”.
When it comes to sustained long-term business performance, cutting fat is not the same as cutting muscle. If the wrong parts of brand spend are pruned, or brands go dark for too long, re-starting ad spend is a costly exercise. This damage is exacerbated when savvy competitors continue advertising and enjoy significant gains in market share.
As Dr Simon Broadbent, renown global media researcher, once wrote: “The sales of a brand are like the height at which an airplane flies. Advertising spend is like its engines: while the engines are running, everything is fine, but, when the engines stop, the descent eventually starts.”
This publication helps to answer the following questions:
- What are the consequences, in both the short and long run, of a brand going dark?
- What is the trade-off between maintaining versus regaining brand equity/market share?
- What happens if I cut my budget in a recession versus keep advertising in a recession?
Want to know more? Take the time to read the report. You won’t be sorry.