IMC Hawks Blog

The Real Cost of Advertising

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Our economic troubles are hurting deeper than the punch from the gas pump, bruise from increased tuition costs, and stabs from the job market. These economically challenging times are also abusing the fundamental business principles that companies have relied on for years. In particular, these bad financial times are changing the way advertisements are valued.

Many companies assume that when they are affected by hard economic times, it is best to pull the plug on various advertisement campaigns as a way to cut marketing costs. However, this kind of penny-pinching seems to only make the struggling financial situation worse. According to a study prepared for American Business Media by Yankelovich Partners and Harris Interactive, businesses who continue to run ads have a significant competitive advantage over those who choose to cut back.

Simply: there is a value to spending money on advertisements, regardless of economic struggles.

Darwin’s theory of “survival of the fittest” has never been so true in today’s economic downfall. Companies cannot risk pulling their advertising from the marketplace if they want to remain in the thoughts and minds of consumers. If only the fit survive, then a company should use aggressive advertisements and marketing strategies as a way to not only reach their audience, but to intimidate the competition. The continuation of building clientele through running advertisements establishes an image of loyalty, faith, and stability a company has in their product or service to the consumer. If the advertisements get pulled, then so will the opportunity to reassure to consumers that the company is prospering despite the economic hardships.

If a company is facing the decision to pull advertisements as an attempt to adhere to budget cuts, it would be wise to think beyond the element of monetary cost. Because the cost of losing attention could be larger than the amount of money you may be saving without advertisements.

-Oliver Evans, Sally Shupe, Jared Sales

Comments

4 responses to “The Real Cost of Advertising”

  1. Sierra Scellato Avatar
    Sierra Scellato

    Sierra Scellato

    If you did not see the main point in this post, you definitely were not looking very hard. I love how the authors decided to set apart their thesis from the rest of their argument. The did it like this:

    Simply: there is a value to spending money on advertisements, regardless of economic struggles.

    Although, my purpose in responding to this post is not to critique the format and diction, they made a valid point. And the idea that continuing to spend money on advertisements even in a position of economic struggles is not only bold, but smart. Not everyone can be the first and the most innovative, so someone needs to show a flair of inspiration that others lack. I totally agree that killing the advertising also kills the image. Being known is one of the highest advantages you can have.

    Connecting this to Seth Godin’s blog, “The Forever Recession”, I am asking myself, “Is this the same thing”? IMC in itself is a new concept and I don’t think it is going away. Especially because IMC functions to change behavior. Isn’t this what Godin was talking about when he said we are going to embrace a whole new system of training?

    Reply
  2. Alexandria Kapczynski Avatar
    Alexandria Kapczynski

    This post brings up some very relevant points and leads into the idea that “It takes money to make money.” During times of trouble, people tend to panic, which only makes things harder for them in the end, Seth Godin addresses this notion of overcorrecting in his blog, “The Forever Recession.” People should attempt to adapt to the new ways, but not completely abandon ship. Business have seen results from marketing so they should not just blindly cut corners to cut costs.

    One of the complications with investing in advertising is that businesses are unsure how to measure the exact benefits of their marketing. It is difficult to distinguish the lizard brain buyers from the others. Attempting to compartmentalize those who buy from specific influences versus those who purchase an item free of outside persuasion, proves to be frustrating but should not make the corporations stagnant with fear. If anything, this should inspire them to try harder.

    Just because it is aggravating to derive inartistic proof and statistics from a marketing plan’s effectiveness, does not mean it can just be done away with. In today’s culture everything is marketing, that is one of the main reasons it is hard to identify if a selected type of advertising works. To pull funds away from this area would be to pull one’s hat out of the race altogether, and at that point you might as well pack up shop and go home. If you are not in the competition, you stand zero chance of winning.

    -Alexandria K.

    Reply
  3. Zach C. Avatar
    Zach C.

    I like this post because it reminds me of something my Dad would tell me about pretty much anything I struggled with: “If it was easy, everyone would do it.” For years companies have strove to create a distinguished image for their product, and without advertising, their is no way to create such an image.

    The idea then is obvious: is the risk, spending money on advertising, worth the reward, getting your product publicity. I agree that it is most definitely worth the risk, even during such hard economic times because, going back to what my Dad used to tell me, if companies did not need to take such risks, nobody would do it. But because these risks are necessary to take, it comes down to the question of how much risk is needed?

    Reply
  4. Wade Boteler Avatar
    Wade Boteler

    I love this post! Mostly because I am a salesman at heart. Also I am currently interning with WECT here in wilmington in the advertising sales department and I am definitely going to look up the article sited within the post and use it to help make sales. I have constantly heard that repetition equals recognition and it still seems that business owners do not want to believe it. I had honestly never thought to use academic research to support the claim that they need to advertise constantly and not just stop after a year until just now. So it looks like I owe you a debt of gratitude for that. Thanks!

    Reply

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