[podcast flashvars=”transparentpagebg: ‘yes’, titles: ‘Recession-Proof'”]https://growwithcars.com/da/wp-content/uploads/2009/03/da_march_2009.mp3[/podcast]
Today’s changing economy is likely driving changes in your operations, from the vehicles you stock to the advertising you buy. While tough times may tempt you to cut the marketing budget until good times return, this approach carries hidden costs: Reduced exposure typically leads to reduced sales. Rather than make across-the-board advertising cuts, consider reallocating dollars to the most effective and efficient forms of media. That way, you position yourself to drive the results you want: more sales and lower per-sale costs.
If you’re looking to optimize your media mix, consider these three tips:
- Go where the buyers are. While plenty of lower-funnel buyers remain, shoppers don’t spontaneously decide to buy a car when disposable income falls. They consider the necessity of every purchase and take more time to research their options. To reach these shoppers, focus on the automotive shopping and in-market sites they use.
- Cut your media fat, but trim wisely. To identify where to save money, carefully evaluate what media delivers results – and at what cost. Surviving in this climate requires that you assess every step of the conversion process and determine where sales originate. While performance issues may have fallen under the radar in good times, now is the time to be vigilant. If an ad buy can’t be measured, don’t buy it. If an ad buy isn’t delivering, find out why. You simply cannot afford to fund a search party for potential buyers when real buyers are raising their hands.
- Double down on media that performs. Just as you should cut out poor performers, it’s a smart move to double down on the advertising delivers the desired ROI. Reinvesting in the media that work rather than dropping the savings to the bottom line will help you emerge from the downturn stronger than competitors who reduce spending.
In aligning your advertising budget with current and projected market conditions, remember that a strategic approach is more likely to drive the efficiency, sales and profit you want. Making spending cuts may feel good in the short term, but they can also be counterproductive – as studies conducted during and after the recessions of the 1980s and early 1990s found. Companies that maintained or increased their ad spending averaged higher sales than firms that eliminated or decreased it – both during the recession and for three years following. In fact, three years after the recession, sales of companies that maintained their advertising position during the slowdown rose 265 percent versus those that did not.