Survey Indicates That Reducing Advertising in a Recession is a Mistake

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More than 48 percent of U.S. adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates that the business is likely struggling, according to a study from Ad-ology Research.

At the same time, a large majority of consumers think businesses that continue to advertise are competitive and/or committed to doing business.

The research study, "Advertising's Impact in a Soft Economy," which was undertaken to determine whether stopping advertising during the recession could harm a business, takes an in-depth look at specific consumer perceptions regarding firms that continue to advertise in the current economy, as well as those that do not.

Not advertising can harm brand
Advertising appears to play a key role in consumers' view of how a business is doing, the study found. By not advertising, businesses may be sending a warning signal to current and potential customers, Ad-ology said.

For example, when consumers no longer see/hear advertising from an auto dealership during a down economy, 50 percent say they view the dealership as "struggling." In addition, 19 percent feel these dealers are "less willing to deal," and only 7 percent believe they "must be doing well."

On the other hand, when a dealership advertises during tough times, 34 percent believe the dealership to be committed to doing business.

Consumer perception is similar for stores and banks. When advertising ceases among the following businesses, consumers:

* View their bank as struggling (48 percent)

* Believe their bank may not be in business much longer (12 percent)

* View their favorite store as struggling (56 percent)

* Believe their favorite store may not be in business much longer (15 percent)

However, when the following businesses continue to advertise frequently, consumers:

* Believe their bank is committed to doing business (43 percent)

* View their bank as being competitive (30 percent)

* Believe their favorite store is committed to doing business (47 percent)

* View their favorite store as being competitive (30 percent)

"It is critical to advertise in the current economic climate, to maintain long-term positive consumer perception of your brand," said C. Lee Smith, president and CEO of Ad-ology Research. "Advertising not only assures consumers of a business' reliability in a soft economy, but it can influence where and what they buy, especially when the ads address concerns about value."

(Source: Marketing Charts, 05/25/09)

Interactive Advertising Expected to Explode

While U.S. retailers' online sales rose 11 percent on average compared to the same period a year ago, Citi Investment Research projects that US retail e-commerce sales will grow 4.4 percent in 2009 to $141 billion -- and jump to 16.5 percent growth in 2010. Video advertising is predicted to generate $1 billion by 2011, and according to Forrester Research, overall Interactive advertising is heading for growth over the next seven years.

Market Vox says that Forrester predicts interactive online advertising, display, email, mobile, search, and social media, will experience a 17 percent compound annual growth rate, totaling almost $55 billion in spending over the next seven years.

Five key online advertising channels will see the following upswing:
* Social media -- 34 percent
* Mobile -- 27 percent
* Display -- 17 percent
* Search -- 15 percent
* Email -- 11 percent

(Source: Adotas, 04/28/09. The complete story can be found here.)

Engage Gen YHow to Get Their AttentionGen Y isn't that much different than Gen X or even baby boomers. Standing 80 million strong, Gen Y is looking to be just as successful, but in half the time. It is struggling in this economy and trying to find ways to stay afloat, despite layoffs.It is the most-connected generation by far, using text messages more than actual phone calls and instant messaging over talking to you in person. When communicating with anyone, it's really important that you understand the receiver's preference. Understanding the tools that Gen Yers use to communicate with each other is the key for forming those relationships and tapping their networks.Gen Y was groomed from birth with technology, and its members seek to get a lot of satisfaction from work. They aren't interested in just a day job; they want meaning in their lives. Talking the Gen Y lingo might help you connect with them, but what they really care about is attention and respect. Most Gen Yers are needy and require a lot of mentorship from older generations. With short attention spans, you better be able to send more messages to them in 140 characters or less (think Twitter) and it better be eye-catching and compelling.Here are some tips to engage members of Gen Y:• Listen to them carefully and analyze their behavior.• Ask them how they want to be contacted before sending out a mass mailing or poking them on Facebook.• Be creative with your marketing because that's the only way you will attract them to your product or company.• Reward them with incentives and they'll come knocking on your door because they were raised to feel special by their parents.• Develop content they can share because they are already active online and have their own channels of distribution.• Recruit them to help you with your marketing to other Gen Yers.Companies and marketers that can understand this generation will see enormous opportunities now and in the future. Gen Y is bound to take over the entire workforce, so your best bet is to learn how it operates, tap its expertise and station yourself where it is already "hanging out."Use your best judgment when reaching out to them because any mishaps will result in a negative spiral of bad press online. You cannot avoid Gen Yers because they are everywhere and changing our business world. The smartest thing you can do is engage them honestly, transparently and authentically.(Source: Media Post, 04/10/09. Article by Dan Schawbel, personal branding expert for Gen-Y. For the complete article, click here.)