Does Advertising Your Business More Right Now Make Sense?
Advertising more right now in this recovering economy makes intuitive sense – more ads equals more customers, right? Maybe, but maybe not.
One thing that is clear is that lately, people are looking for a bargain; customer loyalty is a bit of any oxymoron as customers are generally more interested in saving money than patronizing their favorite businesses. As such, advertising can put your business in front of these potential customers. That is my intuitive take.
Does it actually make sense to advertise more right now to grow your business? Maybe . . . but maybe not.
But a really interesting new book calls into question that very premise, as well as other sacred cows of conventional business wisdom. The book is called Duck and (Re)Cover by Steven S. Little.
In the book, Little points out that this piece of conventional wisdom – that advertising more in a down economy (or even a recovering economy) leads to increased sales growth – is essentially an urban myth.
The book explains that if you Google the terms “recession” “advertising” “study” and “sales growth” – you end up with millions of pages that essentially say something like “The results of a study indicate that businesses that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth.”
The book notes that the study is then cited ad nauseum by anyone who wants to get you to advertise more right now, for example
- The radio station that cites the report to explain why people need to advertise on its station now more than ever
- The PR firm, saying that marketing with them in a downturn is critical
- The freelance copywriter who is looking for clients
So Little decided to find out what this study actually says. It turns out that all of these sites are talking about the “McGraw Hill Research Laboratory of Advertising Performance Report #5262.” Little discovered that what report #5262 actually says and what the millions of sites citing it think it says, are not nearly the same thing.
So What Did Little Actually Discover About More Advertising in Tough Times?
In fact, Little found that report #5262 expressly states that there is no “causality” between advertising in a recession and sales growth, that the study only looked at public companies, that these companies had sales more than $1 billion a year, and that the study took place in 1985.
So, as Little concludes, the McGraw-Hill study and its ‘advertise more’ conclusion only tangentially relates to you if you own “a relatively large industrial company with a business-to-business advertising bent” and you think a study that is more than 20 years old can help you in the 21st century (P.11).
Little’s point, and the point of the book, is that you need to examine closely your business beliefs, especially those relating to how to deal with “the choppy waters of a [challenging economy].” Yes, advertising more may make sense for you, but if it does, it is not because of some old study that is oft-misquoted; it is because that is what your business today, properly analyzed, requires.
And that is what this book does. It helps business owners, including the self-employed business owner, analyze the state of their business accurately. Then it prescribes various ways to see and seize the opportunities that are out there. It is, as the subtitle suggests, “the embattled business owner’s guide to survival and growth.”
As Little told us recently, “In a time like this, opportunities will become available – but you have to get yourself ready for them. That is what the book is designed do.” The trick, he says, is not to over-compensate, or do nothing, or to do what you have always done (because the market has changed now), but to use logic to make smart choices.
This is a really good book. TSE says check it out.