The advertising market during the crisis. Crisis in the Heads: Heads of Advertising Agencies on the Future of the Market Advertising Activity in Crisis Periods
During a crisis, business life does not stop. Instead, it slows down, becomes a little more dangerous - and forces specialists to be more careful in their decision-making, to analyze the market more closely and monitor competitors, and to approach the issue of choosing clients and contractors more carefully. Working during a crisis is like wandering in the dark, trying not to stumble, stumble or fall into a hole, since troubles that are forgivable in daylight in the dark can lead to very sad consequences.
Advertising - lifebuoy
In the midst of the crisis, many companies cut production, cut prices, lay off employees, save on literally everything, just to stay afloat for a sufficient amount of time. The budget for advertising is also reduced: some companies reduce their advertising activity almost completely, severing relations with advertising agencies, for some reason classifying this area as optional. For a couple of years, you can do without advertising, they decide ... And they are wrong.
No wonder it is said that the advertisement is engine of the trade... During a crisis, the "driving" forces of advertising do not diminish at all, on the contrary: for many companies it is it that becomes the lifeline that keeps the company afloat. Statistically, the most difficult times (the crisis of 1998 and 2008, if we talk about our country) most painlessly survived those companies that were not afraid to invest in advertising, when, it would seem, the situation for this was the most unfavorable. The expenses paid off with interest. They almost always pay off if you approach the issue of promotion wisely.
During the crisis, two trends can be clearly traced: when some companies are rapidly cutting their advertising budget, while others are beginning to actively expand it. As a result, the former completely disappear from the field of vision of potential customers, and the latter are replaced by the latter - hitherto less well-known, but more "vigilant", not afraid to be active at a time when the economy is in collapse. Each correctly invested ruble in the conditions of general silence from competitors is able to bear fruit - after all, a potential client at the time of the crisis does not disappear anywhere.
In any unclear situation, it is customary to invest in gold and real estate. However, gold and real estate are getting cheaper, and if you need some kind of long-term project, some kind of "safety net", then advertising will be the best solution.
In addition to the relatively quick result - an increase in the number of sales and an influx of customers - advertising will become a fairly reliable "buoy" during a general economic "flood".
Crisis measures
During a crisis, the client also becomes cautious, selective and accurate, but he does not go anywhere. Like the manufacturer, he wanders in the dark, fearing to stumble or turn the wrong way. This makes him distrustful, makes him more careful about the issue of choice, to sort out the options - and advertising plays an important role here.
A good company representation through high-quality advertising really saves, otherwise how does the client know about the product or service? Advertising catalyzes a kind of chain in the consumer's mind: the product is advertised - the company has funds for advertising - the company does not experience problems during the crisis - the company has customers - they are satisfied with the product - they continue to buy. Consciously or subconsciously, the client comes to the conclusion that the advertised product is worth paying attention to.
Therefore, during a crisis, it is important to constantly remind the client of yourself, to flicker from the pages of the media, TV screen, billboards, banners on the Internet, stands in elevators and entrances of residential buildings.
Even from the crisis, you can get something positive if you approach the distribution of your budget wisely. While some companies will hide their heads in the sand, others at this time can find a better place for themselves and get comfortable on it.
Today we will talk about such an important component for any business as advertising. For many of you, it has long been clear that the finance generated within the company is the lifeblood of business. As for a person, the circulatory system is important, so cash flow for business. If we take an anatomy textbook school curriculum, then we learn from it that a person without oxygen can live for about 4 minutes. Without water - no more than 4 days. And without food - 40 days. As shows world statistics, a modern business without advertising and without contact with its target audience, without an existing customer base can really live no more than 4 weeks... After that, a period of recession sets in: the client base begins to steadily decrease. Incoming calls cease to arrive: phone calls, e-mail. People are no longer besieging your store. And all why? Because you are not advertised. A strange paradox arises.
During the period crisis when the economic situation in the country and in the world begins to deteriorate (although I would not call it a deterioration - the strongest just survive), you have to work much more in your business. And those things that were previously sold independently and even automatically, now you have to sell with effort. Because people have more choices every day, and the desire to spend money is much less. The concept of "easy money" is leaving the market. Or money that randomly went to people as bonuses, bonuses, grants, deductions or bribes.
During a crisis, different entrepreneurs behave differently. Some reduce prices, cut staff, reduce production and save on everything, even on advertising... But this, as a rule, does not help them. The paradox of the modern market is that many businesses, and this is noticeable in many Russian companies, in an era of crisis, cut the most important thing that attracts "blood" in business. I'm talking about an important component of raising money in business, advertising and marketing. It depends on her how your products, goods or services are promoted to the market, and how you contact your target audience.
If we take the 2008 crisis events as an example, we will be surprised to find one rare feature. The largest companies in the market, which still remain leaders in their fields, during the crisis, first of all, began to reduce not the marketing component, not to cut advertising budgets, but what is not directly related to sales. Oddly enough, but Apple, Microsoft and similar companies began reduce development departments... First of all, fire engineers who develop new products and software. Break contracts with programmers who developed new software modules. At the same time, the costs of advertising, promotion and investment in new market sectors, in new advertising strategies, in marketing departments only increased... Since far from stupid people are engaged in investments in these businesses, the market reacted very positively to the reduction of production personnel and personnel responsible for development. The shares of these companies continued to grow successfully even during the crisis.
Think about it now. On the threshold of another crisis wave which comes from Europe, which inevitably affects Russia. Think about whether you are cutting back on investments that can and should bring you money tomorrow. Calculate whether you are cutting back on the force that drives you new customers. Don't you diminish advertising costs, which is beneficial to the sale of your products, goods and services? Weigh everything and make the right conclusion.
Advertising is not only an "engine". During periods economic crises it becomes a lifeline. However, the crisis "eats up" not everyone. As practice shows, those who advertise more than others overcome the crisis.
During the crisis, the advertising market is going through complex shocks, there is an outflow of customers, a redistribution of forces and priorities, a change of leaders. Advertisers are forced to cut ad budgets. Where advertising spaces have been booked six months in advance, there is an outflow of advertisers and the release of advertising sites, advertisers are switching to cheaper types of advertising.
For example, the churn of advertisers from display advertising subsequently translates into an increase in the Internet advertising market sector. However, the online advertising market is also experiencing shocks, in particular, the revenues of banner display systems are decreasing, the number of contextual ads is decreasing, and some clients are abandoning search engine promotion.
In these conditions, there are prerequisites for the redistribution of forces among competitors. The strongest can lose their positions, and the weak get the opportunity to take their place. Thus, companies with a weak brand, using inexpensive Internet advertising, can rise one step higher and firmly establish themselves in a sector that is new to them.
Despite the current situation, the effect of advertising remains the same; it also continues to generate demand, promote goods and services. During a crisis, the issue of evaluating efficiency is especially important. Previously used indicators may not be sufficient for a real assessment. Large companies have long-term goals, but the crisis has made short-term economic performance paramount. This created difficulties in assessing effectiveness, as there is no generalized model for assessing short-term indicators.
In times of crisis, brand strength has ceased to be a key indicator when choosing a product, because consumers' attention has shifted to cheap products. Now is the very time when the opportunity presented itself to strengthen the weaker brands. It is necessary to apply a set of measures that will allow weak brands not to disappear from sight. After the crisis, people will turn to those brands that were active during the crisis. Some companies are better off to suspend advertising altogether, if the brand has not yet been formed, then achieve good results almost impossible. Decreasing demand increases competition, and this leads to the need to reduce prices. As a result, owners of weak brands do not have the money to develop and maintain the brand, and they leave the market.
In each price group, two segments are formed: a cheap segment of non-branded goods and a segment of brands in the middle and high price categories. If a company has an inexpensive product and a correct promotion policy, then it has the opportunity to strengthen its position in the market. With a small capital, it becomes possible to promote a product or service to a large audience of search engines. However, you should prepare very carefully for an advertising campaign, otherwise there is a risk of not returning the money invested. When preparing for an advertising campaign, you should take seriously the selection of search queries. If an advertising agency offers its own options for search queries, then it would be advisable to check each of them for the number of impressions and the appropriateness of application.
Advertising on television has always been considered one of the most expensive and most effective, but this does not mean that large companies will refuse it. Some TV ad providers are forced to cut prices to retain repeat customers. Cost reduction will occur in those areas that bring the least profit. The crisis triggered a reduction in advertising costs, and the budget began to be determined on the basis of performance. Small budgets have limited advertisers to experiment with new ad formats. They are forced to abandon research and switch to already proven ad formats to reduce risk. Despite this, traditional types of advertising are still losing market share in favor of online advertising, but they do not do it as quickly as analysts predicted before the crisis. The most compelling reason advertisers can move into the online advertising sector is that it can attract the maximum number of customers at the lowest cost.
Despite the price attractiveness of Internet advertising, there is still a slowdown in the growth rate of electronic advertising from 30 to 10 percent per year. It is explained by the fact that companies suffering losses first of all refused from Internet advertising services. Most of them did not exist on the market for a long time, many of them did not have time to accumulate funds to overcome the crisis.
If we consider the issue of the success of the business as a whole, then it makes sense to talk not only about the effectiveness of advertising, but also about the effectiveness of the general strategy of the company, which includes pricing policy, marketing issues, management, and advertising. The crisis gives rise to problems at the level of sales of goods and services. If the links between the seller and the buyer are broken, then advertising actions do not bring results. In order to establish connections in sales networks, it is advisable to strengthen advertising aimed at wholesalers. This will help speed up the process of marketing products and promoting them to the regions.
Also, among other anti-crisis measures for promoted brands, one can single out - conducting a short-term advertising campaign with an increased media load. The most powerful stimulating blow is dealt to consumers and brings quick and high-quality results.
It is advisable to conduct research on the effectiveness of advertising, but often the cost of such research is unreasonably expensive. In this regard, it is worth resorting to using simpler and cheaper methods for assessing efficiency.
Sometimes it is still necessary to conduct research, despite their high cost. Such a need is connected with the fact that the company's management may not notice the hidden actions of competitors who are invading their market. Often, advertisers expect strategic recommendations from researchers that will fix the situation at once, but forget that the effectiveness of using research depends on the overall strategy of the enterprise. Research data is simply numbers and metrics that can be used to inform strategic decisions.
Let's summarize the possible scenarios for experiencing the crisis. The first option is to cut costs in those business sectors that are unprofitable, including advertising costs, thus, it is possible to wait out the crisis and preserve the accumulated potential, which will be very useful when a favorable atmosphere comes. The second option presupposes active actions at the time of the crisis, aimed at capturing market areas from which competitors are leaving. These actions can be realized only with the help of intensive advertising and a competent policy.
Why do companies increase their advertising budget in times of crisis?
A crisis is an unpleasant phenomenon that in one way or another affects all large and small companies and organizations.
In people there is less money, as a result the demand for products is, it's getting harder and harder to sell... At the same time, naturally, no one lowers the rent for office and retail premises, wages employees need to pay, others no one cancels the necessary monthly expenses.
In such conditions can't stop not for a minute, you need to constantly look for ways to reduce costs, optimize business processes, increase sales, in order to only maintain your position in the market, not to lose clients... The work of the formula "movement is life" is seen better than ever.
In a crisis, the question of reduction in advertising budget.
Some executives see this as one of the most effective ways to reduce the costs of the organization, a way survive the crisis with minimal losses, taking advantage of the location of old clients and not attracting new ones. And they look with disapproval at companies that, in difficult economic conditions, on the contrary trying to invest in advertising more and more.
What is the end result?
Also, in difficult economic conditions, buyers will look for more profitable opportunities for themselves, and are likely to find them and make a choice in favor of another seller.
How do they find out about attractive offers from another company? Of course, with the help good timely advertising.
Sales will decline so much that there will be simply nothing to pay salaries, rents, over time. Due to the lack of funds, it will become impossible to work with the remaining clients and buyers. Market positions will be irreparably lost.
The organization will gradually come to its closure.
What happens if the advertising budget is increased?
After all, it would seem only extra spending... Why offer something more and more actively when people simply do not have money?
In fact, everything is much more complicated.
So, the company, under the influence of the crisis in the economy, decides increase advertising budget.
Why?
The logic is as follows. In order for the buyer to pay attention to your product in normal economic conditions, you need to spend $ 1. And in times of crisis, when people have little money, they forced to cut their costs, to plan them carefully, in order to sell your product, you need to spend $ 2.
Let's remember the famous phrase of Henry Ford:
"If I had $ 4, I would spend 3 of them on advertising."
Why is this position relevant in difficult economic conditions?
At a time when it is incredibly difficult to keep your business afloat?
At first ,investing additional funds in advertising, you will be able to maintain sales at a more or less normal level, which will allow keep your company running.
Agree, in difficult conditions, when many organizations are forced to close, even reaching zero or working with minimal losses is already good news.
Secondly, good advertising in a crisis period will save, reinforce and even improve your market position, in conditions when competitors refuse advertising altogether, or decide not to change anything, hoping at random.
If the buyer decides to spend his little money, then he will buy the products from you.
In the previous article, we already figured out the marketing basics of the basics of what is worth and what not to do in times of crisis in your business. And, as you remember, we agreed that the emphasis should first of all be shifted to regular customers.
I'll make a reservation right away - there is no such thing as “anti-crisis advertising” or even “anti-crisis marketing”. Advertising at any time is either effective (cost-effective) or ineffective (unprofitable). But if in relatively calm times you can afford to lose some money for the sake of "experience", then with the onset of the crisis - every penny counts.
So, let's figure out what and how ...
A step-by-step strategy for analyzing advertising campaigns
1. Start to "disable" your ad channels one at a time.
Let's say your typical advertising channels you've been using over the past twenty years are ads in a local magazine, a banner on the home page of a city website, and flyers to the mailboxes of civilians “in the neighborhood”. You regularly invest in all this, but (and most likely I won't be mistaken) you don't really know what brings clients and what doesn't; from which channels there are more people, and in which they are cheaper ... If you know, I can only congratulate you - you are not afraid of the crisis.
So, start cleaning one channel at a time. For example, first don't pay for a magazine advertisement (for 1 month) and see what happens. If absolutely nothing happened - how many clients there were, so many remained, then it's time to admit that all this time you financed the magazine in vain. If there is a visible churn of clients (and analytics of statistics on the client base will help clarify this issue), then promptly return your ad to the magazine.
After you have decided on one channel, turn off the next one ... Make a decision on it ... And so on until you find out in practice what hole the money is flying into. Of course, leaving funded is only the cost-effective advertising channels (which bring in more than you invest in them). If the channel works at zero, we also leave it (this is already necessary for scaling the advertising coverage).
2. Distribute your advertising budget in fractions.
Suppose, after you have implemented the previous point, it turned out that only the distribution of flyers works for you, which means that N money has been freed from the advertising budget. The question arises - where to invest them (and it is necessary to invest)?
And then (lo and behold) a friend tells you about targeted advertising on social networks. Says - the efficiency is awesome. And you're already on fire, you can't wait to throw in all your free money in one fell swoop in attracting new customers, but ... Out of nowhere, another "knowledgeable person" strongly recommends that you hang up a billboard, citing its location in the very streaming segment of the city ...
What to do? Put all the money into the instrument whose advisor sings more beautifully?
In no case!
It is worth investing in new advertising very carefully and literally in minimal doses. Therefore, if you are so sure that the billboard will work, pay for it, and let the rest of the money go to targeted advertising. And in no case, do not take out money from somewhere else (it is better to have a business in a crisis than a business on credit). Until you know the profitability of an advertising channel, do not invest more in it than you are willing to lose.
3. Scrupulously calculate the effectiveness of your ad.
Let's continue to develop the example from the previous paragraph. What should be counted and why?
- the number of conversions (or the amount of money) that you earned thanks to customers who came through the research advertising channel; (we will talk about how to track this in the 4th paragraph of the next paragraph);
- the cost of one attracted client (just divide the amount of money earned by the costs).
Here you can add a lot more - all sorts of ROI, the number of "dry responses" (without a purchase), long-term customer value ... (I'm sure you can understand whether the investment was profitable, and based on these three numbers, even the first two will be enough). But if you start counting even this, you will already be ahead of the vast majority of competitors.
There are 2 fundamental reasons why all of this is really worth considering:
- to be able to compare a more profitable channel with a less profitable one, and redistribute cash injections.
In short, I will not once again remind you of the winged aphorism of John Vanamiker. Just take it for granted that if you can't name the numbers behind your ad with your eyes closed at night, you're not in control.
4. Track the sources of customer traffic.
Ok, you did it as expected and, within the available funds, paid for the hanging of the billboard and targeted advertising on VKontakte. But, uh ... How now to understand which client came from where (if both there and there the phone number is the same)? Or was it necessary to launch them one by one?
No, everything is much simpler:
- specify different phones;
- different e-mails;
- identical pages of the site, but on different subdomains;
- different chants for which you will give bonuses;
- offer different gifts;
Hard? Not so much. But without this, again, there can be no question of any controllability. Chaos, hardcore and more and more immersion of business in the crisis and its economic abyss.
Well, yes ... I hope you will be pleased that such statistics are much easier on the Internet than offline. The same targeted advertising is quietly monitored at all necessary levels by built-in analytical systems. This is the beauty of the Internet - extremely easy access to analytics and the ability to instantly influence it. Well, use it!
5. Test your ads relentlessly.
And now, when we figured out what and why to do, I will try to knock out a cozy chair from under your sciatic muscles ...
Even if you are an advertising and marketing professional who has eaten a dozen dogs on your product and in your industry, you will not be able to write and design an advertisement that will work at its peak the first time. At best, it will pay off.
So what do you do?
If prosperity and general growth were outside the window, I would tell you in detail about a sequential series of tests, even for unprofitable advertising (if it refers strictly to its target audience). But since we have difficult times, remember the main thing:
- We simply turn off unprofitable advertising and do not bother.
- Advertising that paid off - we test it. Tests imply a sequential change of key components one at a time, and observation. Let me explain it on my fingers. For example, you have launched a mailing list for your partner's client base. And it seems to have paid off. Now do the same, but change the title (subject of the email). Are the results a little better (how much better; did you really take all the numbers into account?)? Great, leave the new version. Now test the presence of prices in the price list (they were not there, and you add). Have the results dropped? Go back to the previous version ... And so on, until you run out of elements.
- Be prepared for the fact that the results of the vast majority of tests will differ very slightly from each other. But even if you do not find a revolutionary option, the consistent improvement of each element by at least 3% of the total mass is a big deal.
- Well, now the most delicious ... The best found options - replicate in other advertising channels (but only tested options on yourself). After all, if the headline, text and picture worked perfectly in the mailing list, then they have higher chances in contextual advertising, and in a newspaper ad, and ...
P.S. It would be stupid and inappropriate to give specific examples, especially with numbers (and, by the way, I know my numbers by heart) here would be stupid and inappropriate (all the same it will not be about you). So strain yourself (at least in a crisis) and do everything according to science, on your own experience.
Anti-crisis advertising formula.
And again I'm going to lie to you - there is no anti-crisis advertising. And what I am going to say further is constantly misinterpreted by numerous authors of business books in every way. And although these books often become bestsellers, working advertising, for some reason, does not become any more.
- Your ad should include at least:
- title;
- the ad text itself (which clearly and unambiguously gives an answer to the question of what client problem it solves);
- restriction;
- a call to action (I'm sure you know what it is);
- contacts for communication (as you remember, they should be different in the monitored advertising channels).
- Now read the previous paragraph and make each of the elements as attractive as your creative and financial capabilities allow:
- add a bonus to the title, a special offer, 2 for the price of one, delivery (at least something that will set you apart from the competitive mass of the same goods and services, and make you draw attention to yourself);
- I repeat once again - the text should not be about your product or service or their functions; the buyer wants to understand how these very functions will solve his needs - that's what you are talking about; (that is, not "tangerine", but "New Year's mood", not a "universal suit", but "a suit that is perfect for work and for relaxing with friends", etc.);
- in short - either the product, or the time, or the number of bonuses should be in short supply (otherwise - why make a decision right now?); so enter the following restriction: "only for the first 10", "13 copies left", "only until 22.12." etc.
- do not just “press”, but “press the button, fill out a special form and our specialist will ride a white horse to you within the next five minutes” (feel the difference?);
- I think you can figure it out with contacts.
Any "creativity", "sub-meanings", "allusions", "floridness" and other near-literary heresy are punishable. Be direct, concise, and as accessible as possible. So that not like children - even a fool understands.
P.S. A gift from me personally. Since we are talking about the crisis, use the formula:
- A key distinguishing characteristic of your product or service.
- The very name of your product and / or the group it belongs to.
- Dash (like this "-")
- The word "best".
- The name of your product group.
- The phrase "in crisis", "in times of crisis", etc.
It turns out something like: "Energy-saving refrigerator Otmorozko is the best refrigerator for times of crisis." Or: "Relaxing massage" Nirvana "- the cheapest way to relieve stress in a crisis." (If anything, you can also be creative within the reasonable limits).
P.P.S. Working with advertising (both in the sense of compiling advertisements, and in the sense of subsequent analytics, correction, tests, etc.) is a serious business. Therefore, I ask you, find either the time or a specialist (whom you can afford) - it will still come out cheaper than the notorious "drift" or advertising from time to time.
Let's sum up
- Start turning off the ads you use consistently and see (numerically) how it works out. Leave only what is cost-effective.
- Invest your ad budget in small chunks into multiple channels at once.
- Conduct analytics and count key indicators in the most thorough way.
- Turn off unprofitable advertising channels (even if they are directly related to some segments of the target audience) and forget about them until the crisis is over.
- Test your ads until they turn blue (if you, like me, mean "maximum efficiency" by turning blue). To do this, consistently change each of the elements and track the results.
- Distribute the best ads across all available advertising channels.
- Compose your advertisements under the guidance of some clever book or at least an article (you can even this one, but I do not insist) or hire a specialist.
That's all for today. Enjoy, ask questions if you have (if not, they will). Well, do not forget that you can express your wishes on "anti-crisis topics" and in general.
P.S. Previous material from the cycle "Business in Crisis" -.
And the next one.
