Wednesday, April 29, 2009

Advertise more in a tough economy?

The New Yorker recently published an article entitled, "Hanging Tough." The premise: throughout modern business history, those companies that were aggressive and continued to advertise themselves with fervor not only survived recessions and depressions, but actually were the ones that became dominant players in their industries.

As the CEO of a marketing company, I appreciate articles such as this one - but can only agree to an extent.

In tough economic times it is a temptation to scale back, to be fearful, to be passive. And there are companies that increased their advertising and were successful during those times. But I believe the real interpretation of this is as follows.

In tough economic times, you must run your company so it can 1) succeed and 2) grow. For it to succeed, you have to cut anything that is a waste or extravagance. This allows the company to make decisions based on clear thinking as opposed to fear or desperation. A desperate company makes desperate decisions.

In addition, the company must continue to focus on healthy, profitable growth, as much or more than it did in the good times. That may mean increasing advertising. It may not. Look at your ideal growth opportunities--what do you need to do to achieve them? Will it take better sales training? Better PR? Aggressive expansion of current client relationships? New product development?

True, many uber-successful companies in the past dramatically increased their advertising to grow. But times have changed. Non-traditional opportunities to grow are out there. The companies that are aggressive for growth (whether it be traditional advertising or not) and are run intelligently will be the big winners.

Barry LaBov, CEO
LaBov and Beyond

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