Its not your ad spend, its what your brand says

Published in Philippine Daily Inquirer Business Friday, August 1, 2008

MARKETING JOURNALS WORLDWIDE reveals that brands that have well-survived an economic crisis continued their marketing investments even during tough times. Today, a good number of marketers take heed of this learning but fail to account that in times of economic turbulence, other than media spending and presence, an appropriate brand message is more important.

Consumer behavior changes in an economic crisis

This is because consumers, whether affluent or challenged financially by the crisis, takes a longer time to process a buying intent. Often, initial consumer reactions include deferment of purchases, openness to look at several options or consider substitutes, trading down or recycling.

But all is not lost for marketers and brand owners with limited budgets. After all, several proprietary and syndicated researches reveal that more than the substantial media monies, what is more important is a unique and a relevant brand message or value proposition in turbulent economic times.

Myths of marketing during recession and inflation

Cut marketing investments. The core objective of marketing is to spur demand. In an economic crisis, people shy away from unnecessary spending and consumption. Thus, it is important to make consumers aware of a brand’s value even before they step into the retail or trade area so that one’s brand may be specified in the consumer’s shopping list.

Marketers and brand owners must realize that a highly visible store presence and local store promotions serve a different but complementary marketing purpose and that is, to intercept a potential buyer in the retail area, be they a category or non-category user.

However, when a consumer is resolute in one’s purchase and the incidence is high in financially challenging times; it is more difficult to shift or sway him from his originally intended brand purchase.

Brands are in crisis during inflation; commodities are in. Not true. The market is always divided between brand and commodity buyers, both with different motivations for buying. Brand buyers put a premium on brands they trust and other distinctive values that appeal to the buyers’ motivation. But in times of crisis, brands need to make their value proposition more “economically relevant”. It is during hard times, that a marketer’s competence is best-tested in this area because in branding economically-relevant messages are not just about pricing and discounting.

Spend, spend, spend is the mantra in hard times. It is not just a matter of increasing marketing spend but more a strategy of managing marketing budgets efficiently. More so, it is about the appropriate use of media communications budgets.

One can have an effective media reach among a target market for a less than a 50 times exposure over a given campaign period provided the brand’s value proposition is substantively relevant. Moreover, not all above the line and below the line media communications need to implemented and activated.

Study your target market’s behavior. How do they cope in times of inflation? What are the changes in their lifestyle, buying behavior and media habits? Have they reduced their time going to the malls, movies? Have they cut down their spending on out of home eating, consumption of fashion, leisure, recreation and entertainment?, etc.

Outspend competition versus effective brand messaging. Some brand owners are led to believe that the only way to reach consumers these days is through a balloon budget in media. Not true. Brand value and economic messages are more important. An economic crisis is not the usual, everyday occurrence and this occurrence is meant to be short-lived, or so many businessmen hope. Thus, a brand’s value during this unusual event may be made more relevant by an economic message. Saying and doing the same thing in a non-crisis and a period of crisis may not be as meaningful to your target consumers.


RankTop 20 advertisersJan to June, 2008(millions of pesos)
1Unilever Philippines9,038
2Procter & Gamble Phils4,683
3Nestle Phils.4,677
4United Laboratories4.502
5Colgate Palmolive Philippines4,128
6Smart Communications1.276
7Johnson & Johnson Phils.1.227
8Herbs and Nature Corp.1,214
9Coca Cola Bottlers Phils.1,151
10Globe Telecom1.007
11Monde Nissin Corp.932
12Mead Johnson Philippines897
13Jollibee Food Corporation886
14Wyeth Philippines891
15Philippine Amusement & Gaming Corporation697
16Universal Robina Corporation694
17San Miguel Brewing Group670
18Tanduay Distillers Inc.657
19Golden Arches Development Corporation594
20Del Monte Phils.551

Source: From the leading Philippine research agency based on information from the Nielsen Media Watch, The Nielsen Company Philippines and estimated from media rack rates.

Consumers follow a single mindset of cutting down expense in times of crisis. Not entirely true. Being a brand works well in a period of crisis specially when the cards are played correctly. When a brand’s value and messaging is specially relevant, buyers are willing to buy new products, trade up and buy more. For example, owners of luxury cars are bound to purchase more fuel-efficient car models from trusted and reputable automobile makers; indulgent buyers are likely to trade up, impulse-buy or buy more expensive items provided these may have socially relevant messages; and the middle income may just advance their purchases or do “group-purchase” for household items, etc.

In periods of economic crisis, people may be less predisposed to purchase. But they continue to buy and will buy when there are more substantive reasons to do so. Consumers are not averse to buying but do not like thoughtless consumption in periods of economic adversity. They are more prudent due to more limited resources; are more cynical of advertising and promotional messages in various media; are less whimsical and less moved by outrageous media frequencies and spending.