Henry Ford once said that “Stopping advertising to save money is like stopping your watch to save time.” Looking back at 100 years of brands’ marketing practices and growth during recessionary times proves that the companies who will thrive are the ones who increase their marketing investments and focus on strategic innovation. The U.S. economy is still responding to the impacts from 2020 and is still dealing with supply chain issues, inflation, and generally a stressed economy. But even in slowed economic times, consumers are still purchasing – their behaviors are just a little different. The purchase decision may be longer and involve more consideration and research, but eventually, purchases are made.
Brands that command a strong share of voice and visibility are often the companies that come out ahead. Each of the company stories below highlight how increases in brand visibility, innovating product offerings and communications, and being willing to take a leap forward propelled these brands forward.
The Great Depression (1930s): Kellogg’s doubled their advertising budget and launched a new cereal brand, Rice Krispies. They increased profits by 30%, overtaking Post as the industry leader. As of Q3 2022, Kellogg’s maintains his leader position over Post and is ranked #2 under General Mills.
The 1970s Energy Crisis (1973 to 1975): In 1973, the U.S. government published its first miles-per-gallon report. Toyota was touted for its fuel efficiency. When the 17-month recession hit in 1973, Toyota kept to their strategic plan to build a strong brand and invested in marketing. Growth was strong and Toyota overtook other brands to be in the #2 position of import sales by 1974. In 1975, Toyota beat out Volkswagen as the top imported carmaker.
2. Fast Food Wars during the downturn of 1990 – 1991: Economic downturns often have consumers looking for less expensive options and that is true with restaurant dining where patrons opt for less expensive options. McDonald’s all but eliminated its marketing budget in the early 1990s. PepsiCo, owner of fast-food brands Taco Bell and Pizza Hut, made the decision to invest in marketing and product innovation offering stuffed crust pizza and a value menu. As the economy was coming out of this short downturn, Pizza Hut had increased sales by 61% and Taco Bell by 40%. McDonald’s sales dropped by 28%.
3. Financial Crash of 2008: Del Monte Foods hired its first Chief Marketing Officer. The new CMO increased the company’s advertising and marketing budgets and led consumer-focused campaigns resulting in a profit of $58.6 million in Q1 of 2009. This revenue compared with a loss of $10.1 million the previous year.
Every economic downturn can be scary. Uncertainty can be uncomfortable. We hope that you take two things from this article. First, in your own business, whether that be through your own printed communications, 1:1 personal relationship selling, social and digital media, or a combination maintain your share of voice in the marketplace. Second, guide your clients to maintain their share of voice in their own markets. Encourage them to spend smart and maintain omnichannel strategies.
