Advertise, Advertise, Advertise

An economic downturn brings opportunity for those who are willing to take a leap of faith and who have a cash cow they can use to buy advertising when times get tough.  When you go looking for success stories - or survival stories - from the Great Depression, you read that there are a number of examples of brands becoming successful through the trying times. 
The most widely quoted are Chevrolet cars, Camel cigarettes and Procter & Gamble.  Each of these relied heavily on advertising because they realized that they needed advertising to create and maintain brand loyalty.

In 2008, Dave Chase wrote "How brands thrived during the Great Depression", and provided a good rundown on these three:

• Procter & Gamble. To this day, P&G maintains a philosophy of not reducing advertising budgets during times of recession, and the company certainly did not make any such reduction during the Depression. It's not a coincidence that P&G has made progress during every one of the major recessions. While competitors cut ad budgets, P&G increased its spending. While the Depression caused problems for many, P&G came out of it unscathed. Radio took P&G's message into more homes than ever, and P&G became a pioneer in effective use of that medium, including its role in creating the notion of soap operas.
• Chevrolet. During the 1920s, Fords were outselling Chevrolets by 10 to 1. In spite of the Depression, Chevrolet continued to expand its advertising budget and, by 1931, Chevrolet took the lead in its field. It is believed that Ford's weaker balance sheet entering the Depression rendered it unable to respond to Chevrolet.
• Camel Cigarettes. In 1920, Camel was the top-selling tobacco product. American Tobacco Co. then struck back with the Lucky Strike brand, and by 1929 Lucky had overtaken Camel as the No. 1 brand. Two years later, in the heart of the Depression, Chesterfield also overtook Camel. Camel countered with a dramatic increase in ad spend and, by doing so, demonstrated the power of advertising during depressed times. By 1935, it was back on top.

Advertising Lesson #5 from the Great Depression: Advertise ... Hard.

This is my final installment on Depression Marketing.  Hope you enjoyed it, and found it uplifting.

SCARE Them

Fear is a very powerful motivator.  In an economic downturn, people are particularly vulnerable.  Preying upon those fears is a food way to sell your product (questions about ethical considerations aside, perhaps).  To use fear, you need to understand individual's fears and how your product can solve those:

• Will I lose my job?
• Will I be able to buy groceries?
• Can I keep my house?
• What if something happens to me?  What will happen to my kids?
• Can I afford to buy that car?
• Should I cut-back my cable service?

Robert Bruce Donald in his article "Buying the Dream" wrote about advertising in Life Magazine:
"Another reaction within the advertising community was to insinuate guilt for products such as insurance, which, when not purchased, put family in an unreasonable situation in "these times"."

Russell Johnston in his article "Opportunity Knocks" wrote: "Many agents turned to fear campaigns to sell their goods, admonishing consumers not to let themselves get yellow teeth, bad breath, unsightly clothing, or a host of other socially disagreeable ailments that might lead to lost opportunities. For instance, in 1934, Gillette ran a series of ads for its Blue Blade line suggesting that men who were careless about their appearance were more likely to lose their jobs."

Advertising Lesson #5 from the Great Depression - Fear Sells.

 

The sun will come out, tomorrow

When you are in the depth of a financial crisis it is hard to believe thing will ever get better.  You have to know that they will.  They always do.
 
How long is a recession?  The average length of the ten recessions since World War II has been 10.4 months, with a range of 6 months in the 1980 to 16 months in the 1981-82 recession.  Of course, the big Depression is the thing that everyone worries about.  The Great Depression lasted from 1929 to 1941.  US GDP contracted by 28% between 1930 and 1932 and hit the bottom in 1933.  The Great Depression featured global impacts of massive bank and business failures, and crazy unemployment.  Not a fun time.

When a recession hits, adjust your strategy to the future.  Robert Bruce Donald looked at advertising in Life Magazine between 1936 and 1939, in his article "Buying the Dream"

… In truth it seems that 30s consumers must have needed to have one foot in a "dream world" of aspiration while one foot remained firmly on the planet, with the pendulum swinging toward the dream as the duration of the hardship lengthened.

In summary about the Great Depression:

What was illusion and what was fact?

Advertising twisted the message to serve an admittedly self-serving, yet useful purpose. Many of the products advertised were just beyond the reach of the consumer who read Life. That was absolutely as it should be and Life along with its advertisers knew it. Striving toward a better grade of whiskey, a smoother smoke, and even down the road perhaps a new automobile, served a very useful purpose: it reinforced the cultural imperative that if you were not climbing the ladder of success, you were not buying into the American Dream.

If you were not buying into the American Dream, weren't you just fooling yourself?

Advertising Lesson #4 from the Great Depression ... Remember that the economy and prosperity will improve.  When it does, you want to be sure that your products are top-of-mind and something for which your prospects have a yearning.  Give them something to need.

They still need to buy things ... make sure they are your things

Over on Profy.com, back in 2008, Svetlana Gladkova wrote “Are We Sure About Pending Collapse of Ad-Supported Internet?” 

Svetlana wrote a great story about the impacts of the depression on companies and how they responded to it.  Svetlana found that advertising remained a relatively healthy industry through the depression.  Why?  Given the very bad economy, why would companies continue to advertise?

Simple answer really when you think about it.  People still need things.  Those things may be pretty basic.  Those things need to be really cheap.  Those things must be the things you are selling.

The first thing to keep in mind is that people will not stop buying products that are essential to them. True, people will hardly buy luxury products when they need to make decisions on what is really important and what they could live without given limited resources. But that does not mean people will not buy anything at all - it simply means the focus will change for them. So the first conclusion is that we will obviously see less luxury brands advertised. But it does not mean that manufacturers of those essential products will stop advertising as well. What’s more, they will have to compete with each other for those scarce money people will have in their disposal.

What’s more, in a bad environment consumers will be actively looking for better deals to spend those scarce money wisely. And if a company can offer a better deal to a consumer, it should advertise this opportunity because if no one knows you have something better to offer when compared to your competitor, how will you manage to make consumers make a choice in favor of your product.

So ... Lesson #3 from the Depression is ... be a value-product and make sure your target market knows about your value through clear and concise advertising.

Where's the economy going ... and what can you do about it

The current noise is that the economy is teetering on disaster once more.

What is the best marketing strategy when the economy is in the dumps? Cut back? Well, yes, in some areas of your business you should cut costs to the bare bones. But, history of “tough times” has shown that companies that invest in marketing and selling value will come out the other end of an economic slump as the champions.

I'll see what I can dig up as evidence over the next few days.