The textbook definition of a recession is a period of declining economic performance across an entire economy, frequently measured as two consecutive quarters. In other words: it's a time when most Central Savannah River Area small business owners sell fewer of their goods and services.
There is one thing a recession is not. It is not a time for Augusta area small business owners to stop advertising.
One of the greatest marketers of all time, Henry Ford, once said, "The man who stops advertising to save money is like the man who stops the clock to save time."
There are many examples of companies that have proven this aphorism to be true. Your bowl of cereal this morning could be one example.
The New Yorker magazine financial columnist James Surowiecki writes, “In the late nineteen-twenties, two companies—Kellogg and Post—dominated the market for packaged cereal. It was still a relatively new market: ready-to-eat cereal had been around for decades, but Americans didn’t see it as a real alternative to oatmeal or cream of wheat until the twenties.”
“So, when the Depression hit, no one knew what would happen to consumer demand. Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.)
“By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty percent, and it had become what it remains today: the industry’s dominant player.”
What you ate for lunch could also be an example of a company that thrived by advertising its way through a recession.
In a recent article in Forbes, media consultant Brad Adgate explains that "In the 1990-91 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%."
Many CSRA business owners, unfortunately, do not have the financial resources of Kellogg's or Pizza Hut. So, it is inevitable that some advertising budgets may need to be trimmed or re-configured. For those companies, advertising on Augusta radio makes the best sense for several reasons.
According to Nielsen, one of the most potent components of a marketing campaign, as it relates to sales, is reach. This is the number of consumers who actually are exposed to an advertiser's message.
Reach, it turns out, is more powerful than targeting, branding, context, or recency.
Augusta radio, provides, by far, the largest reach of any local advertising medium. It reaches significantly more consumers than local TV, local newspaper, social media platforms like Facebook, or streaming audio sites like Pandora and Spotify.
Over the past few years, Nielsen has conducted over 20 studies to determine what type of ROI a business can expect from radio advertising. Although the results varied by industry, the average company generated $100 in sales for ever $10 invested.
The chart below shows the range of returns from each study.
AdAge, a trade magazine for advertising professionals, calls these types of return "eye-popping". The magazine goes on to say radio's ROI is superior to commercials on TV, online, and social media.
Local business owners have always known that they can expect impressive returns-on-investment when advertising on Augusta radio stations.
"Radio advertising, truly, put our store on the map," says Suzanne Lilly Honeymichael. She and her late husband Ray Lilly started Hardwood Floors & More in Evans, Georgia in their home during the late 1980s.
In 2007, the Lilly's expanded into the 8000 square foot store on Washington Road, where it has been ever since.
"I was hesitant to start advertising back then," says Ms. Lilly Honeymichael. "I just didn't realize what a strong return-on-investment advertising could bring for us. So, we started slowly."
"The first advertising campaign was on a single Augusta radio station," she remembers. "Pretty quickly, people were coming in telling us they heard about us on the radio."
"Twelve months later, we added six more stations. It has worked so well that we have been advertising on the radio every week since then."
In the middle of 2018, Jonathan Wingard opened his own State Farm insurance agency in North Augusta, South Carolina. Since then he has added 120 new households as clients.
After about 30 days in business, Mr. Wingard began advertising on Augusta radio stations. "New customers come in all the time," he says, "and say they heard about us on the radio."
"I do as much as I can afford," he says. "Since I opened, I have invested about 8% of the income generated by my existing accounts back into advertising."
To break even on his investment, Mr. Wingard says he needs to add six new households a month to his book of business. Right now, on average, he is adding 17.
"I have added more new accounts in seven months," he says, "than the other six local agents combined add in a year."
"I credit my growth with a combination of true-grit, follow-up, consistency, referrals, and radio advertising. These factors have made me the 37th fastest growing State Farm agents in the country among new agencies."
Mr. Wingard began advertising on just two Augusta radio stations. "Almost right away, customers began telling me they heard me on the radio," he says. He now invests in commercials on seven stations.
Advertising During Downturns Has Extraordinary Value
A study published by WARC determined that increasing advertising during a downturn has extraordinary long term value for any business.
According to the study, "those advertisers who increase spending, whether modestly or aggressively, achieve greater market share gains than those who cut their advertising investment. This, in turn, puts them in a better position to increase profits after the recession.
One can hope that the next recession will be slight. But hope will not guarantee a CSRA small business owner's ability to survive or even thrive during a downturn. Advertising can be a lifeline.
More Advertising Advice For CSRA Small Business Owners
- Wedding & Bridal Advertising: How To Engage CSRA Brides and Grooms
- CSRA Business Owners Can Improve Advertising By Deleting One Word
- Restaurants in CSRA Find New Customers With Ads On Augusta Radio
- How Newspaper Advertising in Augusta Compares To Local Radio
- CSRA Home Builder Uses Radio Advertising As Foundation For Success
- What Is The Best Way To Advertise In Augusta And The CSRA?