The tremendous lack of consumer confidence in the economy is trickling down into everyday business decisions. We are struggling through a very difficult economic climate but our businesses must go on, and we have to maximize our limited marketing budgets.
As I talk to national marketers, they are passionately looking for innovative ways to promote their products while maintaining a constant return on investment (ROI). By and large they are not significantly reducing their budgets, although some minor cutbacks are planned for the fourth quarter. Instead they are looking for ways to redeploy their resources to maintain a strong visual presence with their potential consumers.
For them, the bulk of their investments will be directed to television and the Web in the general media arena, experiential/event marketing and increased in-store promotional efforts to generate short-term sales. They can afford the high cost of TV.
What should we do here in Sarasota? Like any good consultant, I can honestly say, “It depends.” Seriously, your strategy has to reflect your marketing objective. If you are focused on long-term brand building versus short-term sales spikes, you will take different approaches.
However, unlike the national advertisers, I do not recommend increasing or even maintaining television advertising. In fact for most of us, reducing or eliminating TV is probably a good strategy. For one thing, 2008 is an election year and this one promises to be very expensive. With the local congressional and spirited national elections, the September to November period will see prices rise substantially.
Further, 2008 is an Olympic year and that will drive up TV prices in the July-August period. By the way, TV ratings for non-Olympic programming will be very low, making this medium very inefficient. Based on national historical trends, where local TV costs have risen from 25 percent to 100 percent, you can find a lot more efficient ways to spend your money.
So, back to my “It depends.” If you are primarily concerned about brand building, I would look to a strong base on the Web and in magazines—in that order. In the fall I would also look for a few key events that target your market and try to find a real (and cost-effective) sponsorship opportunity. Remember, you should always have a focused (make that single) message to communicate.
If you are looking to spike sales, then I would look first to the Web and then newspapers and perhaps a short-term flight of radio for a specific promotion. Your retail business should be your promotional outlet, and you need to drive new customers into the establishment. Your message should be tactical; that is, give the customer an immediate reason to shop. But keep in mind you always have to stay true to your inherent point of difference. Do not ignore the opportunity to keep your brand essence in front of the public while doing a promotion or two.
Let me share with you some reasons why the Internet is the best strategy. According to the Center for Media Research, a recent survey found that:
• 64 percent of all respondents went online before making a purchase;
• 81 percent of these consumers had
household incomes over $75,000;
• 78 percent were college graduates;
• 77 percent were 24-34 years old.
Furthermore the study also indicated that 77 percent of those upper income folks and 74 percent of the college graduates conducted research online before making an in-store purchase; 32 percent and 31 percent respectively actually used a coupon or rebate found online.
It seems pretty clear to me that consumers are in control. They are using the new media as a foundation for information. To be effective you must have a strong Web site that gives them a reason to choose you first. And you can also use it to increase immediate sales—just make them an offer they can’t refuse.
The balance of 2008 will be highly contested for retailers. Once the elections are over, we should see a significant positive consumer mood swing; in the past, an Olympic and election year has also resulted in increased spending. The optimism generated should carry through the holiday season and into 2009.
Times are tough, but as Yogi Berra once said, “The future ain’t what it used to be.”
Lou Schultz is a communications consultant and owns Canvas Café in downtown Sarasota. Formerly, he was CEO of Initiative Media, a $23 billion global media services company. His awards include Mediaweek’s Director of the Year and Advertising Age’s “Top 15 Agency Innovators.” Contact him at [email protected] .com.