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The Importance of Brand in a Slow Economy
This year, headlines have told seemingly endless tales of a falling stock market, decreased consumer spending, and layoffs. Analysts estimate that the U.S. economy grew at only a 0.3 percent rate in the second quarter, compared with 5.6 percent growth for the second quarter of 2000. Not only are consumers keeping the purse strings tight, but so are business leaders.
With an already crowded and still growing technology arena, it is more vital than ever for companies to maintain brand awareness, promote a positive image to customers and investors, and stay attune to what competition is doing. In this period of economic unrest, is now the time to cut back marketing and public relations budgets? Marketing experts say absolutely not.
According to Marketing News, a publication of the American Marketing Association, the arguments for maintaining or even increasing marketing spending during dismal economic times are compelling. Experts say that when executives look for savings, they should fight to keep marketing and PR budgets intact, and if possible, even lobby for an increase.
"Marketing money is like fuel in a car,” says Sergio Zyman, CEO of Atlanta-based Zyman Marketing Group Inc. (formerly chief
marketing officer of Coca-Cola Co.). “You take the fuel out of the tank, the car stops. You take the marketing out of the brand, and the brand stops.” And while not every client’s main objective is brand awareness, every business shares one common objective: to increase sales. It would seem logical that when the market is tight, companies need marketing more than ever. “But that’s the time when it usually gets cut back, which makes little sense,” says Mike Ryan, professor and chairman of the marketing department at the University of Michigan Business School in Ann Arbor. “If you know that some (competitors) are going to cut back, it gives you a chance to get share-of-mind, because the same amount of advertising [or PR] you regularly
do might be seen or recognized more. The company with the foresight to do more marketing during a recession can blow past the competition.”
A recent article from The Holmes Report entitled, “This is Not the Time for Tech Firms to Scale Back PR,” cites other issues that warrant the continuation of strong PR efforts, such as community relations, employee communications, and public
affairs. An increasingly complex agenda on Capitol Hill will impact technology companies as public opinion puts the tech sector on trial.
“Legislators are looking at a laundry list of technology
issues that range from Internet taxation to intellectual property rights to privacy. Labor unions are targeting the
tech sector with an eye to recruiting a new generation of members from companies in the telecom and dot-com industries. And a growing chorus of social and community activists are asking why tech companies don’t feel the need to give anything back to the society that spawned them. Does this sound like the
right time to be cutting back on their public relations spending?”
The Report goes on to state that there has never been a greater need for strategic public relations counsel that “cuts through the clutter and delivers real competitive advantage.” Technology companies and their agencies alike work hard to stay ahead of the competition, and “PR people who can recognize and capitalize on competitive opportunities with media, analysts and investors will find themselves increasingly indispensable.”
[PRINTER FRIENDLY VERSION]
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