Continuing to advertise through times of economic uncertainty and instability can benefit your business in the long term, according to technology company MYOB.
The latest MYOB Business Monitor survey of 1000 SME operators from across the country, revealed a sharp drop in SME’s marketing intentions as a result of the scale of the COVID-19 crisis.
Surveying conducted in the second half of March found that 20 per cent of businesses planned to reduce their marketing and advertising spend over the coming year, compared to just 11 per cent of businesses interviewed before March 16.
MYOB NZ marketing manager, Krissy Sadler-Bridge, says now is not the time for SMEs to turn off marketing altogether, but instead, re-evaluate their strategy and focus on what is best for their business.
“Given the widespread impact of the coronavirus pandemic and New Zealand’s unprecedented lockdown, businesses will be looking very closely at every aspect of their outgoings and investments.”
Sadler-Bridge further explains that quality over quantity should be the guiding principle for businesses making decisions about their marketing investment.
“Before they dive into their tactical marketing, it’s extremely important for SMEs to do a diagnosis of the position of their business.
“Take a step back and review what’s happening in the market. With so many things changing – and frequently, their positioning, the demand for their product and what their competitors are doing may all have been impacted. Any strategy should adapt to take into account these differences and how they are likely to change over time.”
In any crisis, it also pays to be mindful of the type of content featured in marketing promotions, according to Sadler-Bridge.
“While a marketing message needs to be on brand, businesses should also be taking into account what’s happening in the wider landscape. Reviewing their messaging regularly to make sure it is appropriate and up-to-date, highlighting anywhere they are helping their community or making a difference locally, and ensuring they are very clear on why – in these current circumstances – customers should choose their products or services.”
According to research into the performance of businesses following the Global Financial Crisis (GFC), organisations that continued to advertise through the recession tended to come out stronger.
A study by Harvard Business Review found companies that balanced cutting costs with a continued investment in marketing, did well post-recession.
Global brands such as Lego and Dominos both launched campaigns during the GFC, unlike their competitors, leading to an increase in profits and sales for both businesses.
What’s more, sales of global retail giant, Amazon, grew by 28 per cent during this turbulent period, due to their decision to continue to innovate and launch new products while competitors reduced their investment.
Specific to digital spend, online advertising revenue in the UK grew by 20 per cent in 2008, in part because of the ability businesses had to monitor progress, measure results and pivot in response to consumer response – a benefit of using online marketing platforms.
“While marketing is often seen as an expense that can be turned on and off, it is important to recognise the value of a brand and the investment made into building a position in the market – something that can erode quickly if businesses dramatically reduce their presence,” says Sadler-Bridge.
“However, money is tight for SMEs, so the focus should be on campaigns and marketing tactics that can provide a tangible return. Campaigns that provide a click-through rate or cost per click are best, because SMEs then have the information in real time to immediately check if they are underperforming, or if people are clicking through and purchasing their product.”
Sadler-Bridge explains that in the current environment, there are also opportunities for businesses to get more value from their marketing investment.
“Now would be a good time to talk to advertisers about what promotions they are running to support local businesses and any added-value deals they could offer that suit certain markets.
“With so many people spending more time at home and communicating through digital devices, businesses have a real chance to connect with a wider audience. The large audience, coupled with the flexibility and measurability of online advertising provides SMEs with an opportunity to get strong returns on the investment of small budgets. They might also consider testing different tactics and styles of marketing to engage with their audiences, such as on demand advertising, SEO or a TV commercial, if budget permits.”
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