Every day, it seems, there is more news of corporate cost-cutting. As the economic climate tightens amid an election year and looming recession, businesses often look to marketing as one of the first budgets to cut.
While these cuts can provide some short-term financial relief, data suggests that the long-term consequences are both substantial and detrimental.
Marketing budgets are usually the first to go largely because advertising expenses are flexible; they aren’t committed until spent, can be paused or restarted quickly, and can be reduced without impacting business productivity — or so the logic goes.
Recent studies highlight the negative effects of pausing advertising, with a strong emphasis on the critical role of brand recall and ongoing consumer engagement. The 2023 Edelman Trust Barometer reports that reducing visibility and interaction with consumers significantly diminishes brand engagement and trust.
Nielsen’s findings further reinforce the importance of brand recall, particularly in emerging media channels such as podcasts and influencer marketing.
This impact is particularly significant in today’s economy, where continual engagement post-purchase is crucial for fostering brand loyalty and trust. Once decline begins, reversing it becomes increasingly challenging.
Treating advertising as an investment rather than an expense is crucial during recessionary times, as every dollar reduced can lead to substantial sales losses. Reducing ad budgets versus completely going dark revealed that for every dollar cut 11 brands experienced a loss of 3x that amount in sales returns (TiVo Research and Analytics, Inc.).
Pausing digital ads is especially problematic, as it can lead to disrupted campaign momentum, reduced ad rank, lost algorithmic learnings, and missed sales opportunities. Worst of all, this gives your competitors an edge, as they can now spend less to reach your target customers.
If you need to pause digital ads for whatever reason, there is a better option — simply reduce your paid digital spend to a minimum daily budget. For most campaigns, that would be at least $10-$100/day per campaign, depending on the size of your brand and budget.
A large client was recently forced to reduce its paid media budget due to directives from its corporate HQ. Within two months of the lower spend, the company recorded a 92% reduction in consumer traffic attributed to the cut in digital media.
In 2020, during the height of the pandemic, Coca-Cola decided to significantly reduce its advertising budget, cutting it by 35%. This decision was driven by the belief that marketing would not make a substantial difference during lockdowns. However, this reduction led to an 11% decline in Coca-Cola’s net revenues for the year.
Meanwhile, its competitor, PepsiCo, maintained its ad spend and reported a net revenue growth of 5% in the same period.
This example illustrates the critical mistake of cutting ad spend during a crisis, which allowed PepsiCo to gain a competitive advantage and grow their market share at Coca-Cola’s expense.
While pausing paid media in today’s economic climate can be tempting, doing so could yield more harm than good. Maintaining your advertising spend, or at least reducing it to a comfortable daily budget, will not only secure your brand’s positioning but also strategically position you to gain market share from competitors.
This post borrowed from Anthony Chiaravallo, writer for Marketing Insider. This post was previously published in an earlier edition of Marketing Insider.
The Jonesboro Radio Group has a history of being a part of creating more winners on election night than any other local media.
JRG’s top-rated country station, 104.9 The Fox (KDXY) distances its nearest competitor with shear audience size, and plays a key role in helping candidates get their messages to voters. JRG’s five other signals reach a variety of audiences, many of which are active at the polls for every election.
Make an appointment today, and let our team of Advertising Professionals help develop your winning campaign. Please download our Political Disclosure Statements, including current rate structure, below:
Eager to elevate local journalism to new heights, Trey Stafford, President/General Manager of the Jonesboro Radio Group, announced today that Jonesboro native Rachel Anderson has been appointed as the Editor-in-Chief of the forthcoming JonesboroRightNow online news service.
With over three decades of residence in the Jonesboro community, Anderson brings a wealth of experience and a deep-rooted understanding of the local landscape to her new role. Her dedication to the community has been demonstrated through her extensive volunteer work with organizations such as Million Women Mentors, Friends of EAST, the Jonesboro 2030 Committee, the American Advertising Federation, and the Arkansas Child Abduction Response Team, among others. Her contributions to her community have not gone unnoticed, with features in esteemed publications like the Wall Street Journal, Inside Edition, Discovery Channel, and The Weather Channel.
Prior to her appointment as Editor-in-Chief, Anderson, a certified police officer, served as the Senior Video Analyst and Digital Media Officer for the Jonesboro Police Department, where her expertise in multimedia storytelling and digital communications garnered recognition from both local and national media outlets as well as local service awards including 2021 Officer of the Year by Crimestoppers of Jonesboro and 2023 Best Social Media Account in Best of NEA for her work on the Jonesboro Police Department Social Media Outlets.
In her new role, Anderson is eager to lead JonesboroRightNow with a dedication to journalistic integrity, community engagement, and a commitment to delivering accurate and timely news coverage to the residents of Jonesboro and beyond. “I am honored to be trusted with this role,” says Anderson, “I hope this news site fills a gap that our community is missing in the journalism world. Following my career in the public sector, I consider it a privilege to serve and connect with my community in this new way.”
Speaking about Anderson’s appointment, Trey Stafford expressed his confidence in her ability to steer the new online news service towards success. “Rachel’s deep ties to the Jonesboro community, coupled with her extensive experience in digital media, marketing, and journalism, make her the ideal candidate to lead JonesboroRightNow,” said Stafford.
With Rachel Anderson at the helm, JonesboroRightNow is poised to become a trusted source of news and information, reflecting the spirit and diversity of the Jonesboro community.
The online product, completely free to every user, is slated to launch on Tuesday, April 2 at JonesboroRightNow.com.
At the Jonesboro Radio Group, we specialize in developing campaigns to achieve a wide variety of client goals. Utilizing our six radio stations and our variety of other digital, interactive and radio products we can create campaigns unequaled by any other media company in Jonesboro.
Take Lucky’s Mattress and Furniture, a new retailer in a Highland Drive location between retailers Shoe Carnival and Hobby Lobby. The owner asked us to create a campaign to build brand and image for his new business. We created the $5,000 Shopping Spree. On Saturday, February 10, 2024, several hundred potential customers that we had qualified and invited using the campaign we developed showed up to try and win a shopping spree.
Look through these photos. And, if you are interested in letting our creative professionals build a campaign for YOUR business? Let us know. It’s what we do. By the way — Congrats to Kiara Ewing of Jonesboro! She won the shopping spree!
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The people and companies who USE radio and know it WORKS share their stories and passion about RADIO!
Still reaching over 90% of Americans EVERY WEEK.
And, at Jonesboro Radio Group, we’re LIVE and LOCAL with the radio personalities this market knows and loves.
We aren’t just talking about the communities we serve, we’re a part of them.
Radio advertising works, and here’s why:
“If life was tough before COVID, it’s gotten a lot tougher. In that time, we need to navigate with those that make us feel good, feel warm, and can perpetuate and give us some hope with where we want to go. I think radio does so many of those things to facilitate that connectivity — whether that’s with your past or the present. Radio does that almost better than any other media that I can think of.”
“Radio goes back to the beginning, right? We’ve always had these personal relationships with our local DJs. Since I was a kid, I’ve always been obsessed with my local DJ. And, their influencer status — there was power in that. And, these podcasters — they have that kind of influence now. It’s a one-to-one relationship in your skull practically.”
“Even though you don’t visualize things right in front of you with radio, the sounds that you hear can be just as powerful and just as evocative in bringing to life those moments and experiences and the sense of joy through sound.”
“Radio is going to continue to be a very integral part of the industry going forward. Broadcast Radio is and remains very important to the industry and to cars.”
“Now, more than ever, people are seeking companionship. While listening may have shifted from at work to at home, we at our core have always been reflective of what’s happening in our listeners’ lives. Even though their lives have changed, the need for companionship hasn’t.”
