Why You Shouldn’t Cut Advertising In An Economic Slowdown

Whenever there’s talk of recessions, budget cuts follow. And one of the first things colleges think of cutting back on is advertising. Here are several reasons why that’s a bad idea.

First, it doesn’t make sense to cut efforts to increase business when business is slow. Advertising is selling. And when sales are down, you don’t stop selling, you sell more. But many universities don’t see advertising as selling. They see it as a luxury. And luxuries are the first thing to go in economic hard times. As a result, sales decline even further and brands become weaker as a result.

Second, you can bargain for advertising. Because many businesses and universities cut back on advertising during economic slowdowns, you can now bargain with ad salespeople on price. Our Hobsons sales rep offered to cut our online advertising package down from $16K to $6K for essentially the same service. Offers like this give you unique buying opportunities you don’t normally have in boom times.

Third, you can buy premium placement. Some of the big advertisers are cutting back and leaving their former ad positions open. Just this weekend, I was driving through Portland and saw a premium billboard that was blank with the vendor’s phone number on it. This is unheard of in Oregon which has very few billboards. Many are locked into five-year contracts with large corporations, like Coke. Now, some of the best ones are becoming available. You can also negotiate better placement in other media, like print and radio.

Fourth, you can build your brand while other brands decline. An economic slowdown is a great time to increase your brand’s mind share. This is especially true for small private colleges who don’t rely on government funding or large endowments for their operating budgets. Little changes for tuition-dependent privates in an economic downturn, so now is the time to reposition yourself against the larger, wealthier schools that are seeing their budgets cut because of the reduction in state spending and the hit their endowments are taking because of the stock market. Small privates that don’t spend the same or more during an economic slowdown are missing a huge opportunity.

Some caveats about advertising. Of course, there is still good and bad advertising. If you don’t have clarity on your target audience and target geography you’re flying blind and you should consider reducing your advertising. This would be a good budget cut. Also, be sure to highlight your competitive advantage. Advertising needs to sell. Go back to the three strategic Ps (product, price and place). Which of these are you leveraging? Finally, advertise in the right places. Just because your local radio station is running deals, doesn’t mean that your audience is listening. Bargains are only bargains if it’s worth buying.