Why now is the perfect time to invest in advertising
Why advertise during a lockdown? Read on to find out exactly why you should and what it could do for your business.
As the UK readies itself for what is sure to be another month in lockdown, companies around the country are racking their brains trying to decide how to manage their marketing budget.
According to the WARC Expenditure Report, it is predicted that ad spend fell by 14.5% in 2020 due to the pandemic. But this is expected to make a steady comeback in 2021.
In this post we will answer the question, why advertise and why now in particular is the perfect time to invest in it.
Why have companies stopped advertising during lockdown?
Many companies paused their advertising efforts earlier on in the year for several reasons. Some companies wanted to save their money as they were concerned their income would take a hit from the pandemic, especially with the brick-and-mortar stores closing. Others stopped as they didn’t feel their messaging or product was suitable to be advertised during these times.
This may save companies money in the short term, but it could have much more damaging effects in the long run. The phrase “Out of sight, out of mind” is especially suitable to the marketing sector.
If a product or service is no longer present or being advertised, even the most loyal consumer may see another brand and be attracted away by special offers and promises of better quality.
By halting advertising, you are removing your presence from your consumer’s mind and making room for your competitors to worm their way into your loyal consumer’s head and home.
However, this works both ways, if your competitor has stopped or reduced their advertising budget, it could be your time to make a bigger name for your company and take a bit more Share of Voice – increasing your reach and consumer base.
We have found this to be the case with a number of clients, who managed to elevate their digital performance vs key competitors.
In addition to this, only 8% of consumers think companies should stop advertising during Covid-19, outlining that it is in your best interest to continue with your structured advertising strategy.
So, why advertise now?
- Less competition – with businesses concentrating budgets elsewhere
- Lower prices for adverts via bidding systems
- It keeps your brand visible and in consumer thinking
- It will aid Share of Voice leading to an increase in Market Share
There are plenty of reasons why advertising should be at the top of your agenda. From an online perspective with less companies advertising there is less competition for those prime advertising spaces.
This drop in demand for media placements means you can bid and win those top positions for less money, increasing your share of voice, and eventually market share.
Share of Voice
Share of Voice (SoV) is a measure of the market your brand owns compared to your competitors.
With all things being equal, a business that has a Share of Voice greater than its Share of Market (SoM) is likely to gain a higher market share in the long run. Why is this? Well, because over time, as you continue your marketing activities, your brand recognition and equity will only grow, affording you a greater market share.
In every market, there will be an equilibrium between your SoV and SoM, which will dictate your position.
Gradually as you continue to overspend your Share of Voice, your business will eventually move closer towards the equilibrium, naturally increasing your market share.
As your competition looks to review their spending, one of the first expected cuts will likely be to marketing – with many businesses either reducing or pausing their marketing activities.
With a reduced Share of Voice, your competition is naturally likely to see their Share of Market also reduce, as it follows in line with the market equilibrium.
This represents a huge opportunity for your business to increase its share of the market, without needing to increase spend to do so. Simply staying the course, and perhaps even increasing your marketing spend could see your business’ market share improve in the long-term.
What to consider
We understand that budgets may be tightened, and cutbacks may be made due to consequences of lockdowns and the pandemic. But we recommend trying to avoid cutting out advertising completely.
If you do have to cut advertising spend, it is crucial that you utilise your budget, through a data-driven, customer focused strategy. Think carefully about:
- What are your KPI’s? Think SMART objectives. Brand Awareness, Lead Generation, Purchases?
- What channels are your target audience/s using?
- What messaging has worked best in the past? E.g. Promotional or brand lead
Our experienced team can help you decide on the best approach for your campaigns based on current market data as well as considering your previous campaign results. Having started our life in the last recession we know all about making the most of the budget you have and can work with you to achieve your 2021 goals.