The economy has everyone in the U.S. worried about what’s ahead. Many are calling for another great depression, and it is hard to know just what that will mean in a world where so much business thrives on the Internet. It’s a different world than it was in the 30s. Of course most money made on the Internet comes from advertising, so naturally, one has to wonder how Internet ad spending will fare in the not-too-distant future.
Svetlana Gladkova at Profy has a very interesting article in which she looks at what advertising was like during the Great Depression, and uses that to project what it would (or should) be like during our current (and upcoming) economic woes:
There was quite a number of examples of successful brands during the Great Depression, including Chevrolet cars, Camel cigarettes and Procter & Gamble (that gave birth to the phenomenon of soap opera during those hard times). And all of them relied heavily on advertising because they realized that they needed advertising to create and maintain brand loyalty. They simply pretended there was nothing particularly wrong with the economy and consumers still had money to spend – and this proved to be the right approach for them.
We should also keep in mind that advertising is one of the measures to demonstrate to consumers that the company is healthy. After all, not all the consumers have a daily habit of tracking stock market behavior to know what’s going on – yet when they see a company spending money on advertising, they think everything is fine with the company.
As I talked about in an article for SmallBusinessNewz a while back, branding a need can be an effective strategy for advertising, and after reading Gladkova’s article, I have to say that the concept has probably never been as important to a campaign’s success as it is in such rocky economic times.
Advertisers need to make consumers see not only why they should buy their product, but why they actually “need” their product. You convince them that the need is there, and then show them why your product is the solution to that need.
The example I looked at before was a press release from GoDaddy that looked at an IDC study showing that half of small businesses in the U.S. didn’t have websites. In a way, they “brand the need” for a websites, and then of course, the product they are selling the consumer is a domain.
Sidenote: Another way to keep customers during a weak economy is to save them money. This means coupons, sales, and promotional giveaways. Customers are bound to spend more money with you if you can save them more money than they would save with one of your competitors.
But back to Internet advertising (spending is 15.2% in the US and 21% in the UK by the way). As Murdok CEO and Murdok publisher Rich Ord noted in a recent article about Gawker’s layoffs, Gawker’s own sales are way up from last year. Murdok sales are up 40% from last year. It is true that we’re seeing many layoffs from big Internet companies lately, but let’s not get ahead of ourselves. Internet advertising is fine. If anything, perhaps more attention should be paid to this advertising medium than ever before. At least until people start dropping their Internet access as an expendable expense, but last time I checked, broadband use was the highest it’s ever been.
Online advertising is global, meaning that it has a much further reach than any other form of advertising, which is another point for the industry. What do you think about the future on online advertising?
