1) The document discusses how maintaining or increasing marketing spend during an economic recession can provide opportunities for gaining market share from competitors who cut back.
2) It presents evidence that companies who increased marketing during recessions saw higher sales growth in subsequent years compared to those who cut back. Maintaining share of voice can directly impact maintaining market share.
3) The document warns that cutting marketing now can cause long-term damage due to loss of market share and profits in future years after the recession ends.
The Future of U.S. Pension Financing — Lessons From Europe welshms
This Towers Perrin presentation examines alternative risk financing techniques being implemented by companies in Europe with defined benefit (DB) pension plans. These techniques offer insights into the future of financing global pensions, both in the U.S. and elsewhere.
At the Advertising Research Foundation’s (ARF) 2011 Annual re:think convention, David F. Poltrack, Chief Research Officer of CBS Corporation & President of CBS Vision and Kevin Bowen Principal of The Cambridge Group presented a presentation entitled The Future is Now: In Pursuit of a More Efficient and Effective Media Strategy. Advertising effectiveness is discussed with a focus on TV programming.
Ipsos MORI Captains of Industry Survey 2012Ipsos UK
The top issues facing Britain today according to the 2012 Captains of Industry study conducted by Ipsos MORI are the Government deficit (mentioned by 23%), Lack of economic growth (22%) and the Eurozone (20%). This is marked change from 2011 when the Eurozone was the most frequently mentioned issue, identified by 43%.Over half the Captains interviewed (57%) feel the general economic condition of the country over the next 12 months will remain the same, with a further third (31%) expecting economic conditions to improve. Just (12%) think the economy will get worse. This represents a considerable improvement from last year when 56% of Captains felt the economy would get worse.
See http://www.ipsos-mori.com/researchpublications/researcharchive/3107/Britains-bosses-share-concerns-of-the-public-over-deficit.aspx
Calculating the impact of your Advertising Campaign is a crucial step in evaluating your effectiveness and laying your future advertising strategy. Learn the tools of evaluating advertising.
The Future of U.S. Pension Financing — Lessons From Europe welshms
This Towers Perrin presentation examines alternative risk financing techniques being implemented by companies in Europe with defined benefit (DB) pension plans. These techniques offer insights into the future of financing global pensions, both in the U.S. and elsewhere.
At the Advertising Research Foundation’s (ARF) 2011 Annual re:think convention, David F. Poltrack, Chief Research Officer of CBS Corporation & President of CBS Vision and Kevin Bowen Principal of The Cambridge Group presented a presentation entitled The Future is Now: In Pursuit of a More Efficient and Effective Media Strategy. Advertising effectiveness is discussed with a focus on TV programming.
Ipsos MORI Captains of Industry Survey 2012Ipsos UK
The top issues facing Britain today according to the 2012 Captains of Industry study conducted by Ipsos MORI are the Government deficit (mentioned by 23%), Lack of economic growth (22%) and the Eurozone (20%). This is marked change from 2011 when the Eurozone was the most frequently mentioned issue, identified by 43%.Over half the Captains interviewed (57%) feel the general economic condition of the country over the next 12 months will remain the same, with a further third (31%) expecting economic conditions to improve. Just (12%) think the economy will get worse. This represents a considerable improvement from last year when 56% of Captains felt the economy would get worse.
See http://www.ipsos-mori.com/researchpublications/researcharchive/3107/Britains-bosses-share-concerns-of-the-public-over-deficit.aspx
Calculating the impact of your Advertising Campaign is a crucial step in evaluating your effectiveness and laying your future advertising strategy. Learn the tools of evaluating advertising.
Millionaires: Do They Still Live Next Door, or Have They Moved?Pamela Danziger
The demographics of millionaires debunk 10 commonly held myths about millionaires that may be impeding marketing to this HNW and UHNW consumer segment defined by wealth, not income.
Luxe is in flux. That is the twitterverse headline for a new survey among more than 600 luxury executives about the state of the luxury industry. What’s keeping these executives up at night are many and diverse, but it all boils down to this:
The disruptive effect of changes in the luxury consumer market that requires reinvention of the traditional way of doing things to get the industry, and luxury brands, back in growth mode.
We face a luxury industry in crisis. The first thing to do in any crisis is a critical assessment of the situation. Fortunately, Luxury Daily and Unity Marketing have collaborated to do that for the luxury industry, in the new State of Luxury 2017: The Insider View report. It contains both detailed quantitative data – descriptive statistics – and qualitative insights – the prescriptive assessment. In it luxury brands will find a guide to navigate the new luxury market evolving before our eyes.
-Creating Marketing Plan for Volkswagen\’s new product: The Blizt electric car.
- Utilizing different maketing techniques such as SWOT, market research, etc, to identify target customers and best marketing channels to reach them
-Conducting strategic plan to market the product to receive the best result.
B2B Business Marketing - Rinaldi Case StudyChiara Cilardo
B2B case study: defining a business strategy based on the analysis of company results, actual market, competitors position in order to build an effective plan to increase its market share.
Team Members: Chiara Cilardo, Cristina Munoz Garcia, Azzurra Maria Barausse, Valeria Di Persio D'Agostino
Presentación realizada por la PPA explicando los beneficios de mantener la inversión publicitaria en general, y en revistas en particular, en períodos de recesión
NAM’s Chief Economist, Dr. Chad Moutray, and his renowned ability to break-down complex data into straightforward, usable nuggets of information goes through the latest numbers for you. His in-depth insight will provides a comprehensive look at manufacturing industry trends and the current state of the manufacturing economy in America.
4. Don’t waste a good recession
1.
Investing in a recession works
2.
3. Share of voice has a direct impact on market share
4. Cutting back now causes long-term damage
5. Only two things in a business make money – innovation &
marketing; everything else is cost
5. “I was asked what I
thought about the
recession. I thought
about it and decided
not to take part”
Sam Walton
Wal-Mart Founder
11. The worst is over
Source: National Bureau of Economic Research (USA)
12. There is plenty of demand out there
Personal Expenditure on Consumer Goods and Services (€ billion)
€92.5 €91.6
€86.9 €85.2 €84.6
€81.4 €82.2 €80.7
€76.1
€71.2 €73.4
€68.5
€65.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 F
Source: Central Statistics Office/ Central Bank Forecast
13. There is plenty of demand out there
Personal Expenditure on Consumer Goods and Services (€ billion)
€92.5 €91.6
€86.9 €85.2 €84.6
€81.4 €82.2 €80.7
€76.1
€71.2 €73.4
€68.5
€65.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 F
Source: Central Statistics Office/ Central Bank Forecast
14. ….and recessions are always followed by
expansions and prosperity
Source: National Bureau of Economic Research (USA)
17. “The rationale that a company can afford
to cutback on advertising because
everybody else is cutting back is fallacious;
executives should cash in on the
opportunity that rival companies are
creating for them”
19. The actions taken during a
recession decide the future
growth or decline of a company
20. Only 25% of companies invest in a recession
70% of these companies
will maintain their growth
25% for 5 years after the
recession. The majority
reach a new & sustained
high
Source: Duane Sprague, Bain & Co., Coopers & Lybrand, McGraw-Hill, The American
Business Press, Strategic Planning Institute/Cahners Publishing, Fortune Magazine
21. 75% cut back
Less than 30% of these will
75% ever regain the market share
and profitability lost during
the recession
Source: Duane Sprague, Bain & Co., Coopers & Lybrand, McGraw-Hill, The American
Business Press, Strategic Planning Institute/Cahners Publishing, Fortune Magazine
23. …and from the UK
Companies who increase marketing tend to see a 2% gain in market share
2.5%
Market share change following
2.0%
2.0% the first two years of recovery
1.5%
1.0% 0.8%
0.5%
0.0%
Cut marketing Maintain marketing Increase marketing
-0.5%
-1.0% -0.8%
Source: IPA Business Effects Paper (UK)
Data collected on 1000 businesses during periods of market downturn and subsequent market recovery
26. For every 10 points that SOV exceeds SOM
you should gain 1 point of market share
Market share growth vs “excess” share of voice
The opposite is also true – a brand can expect to
lose 1 point of market share for every 10 points it
allows its SOV to fall below its SOM
Source: IPA Datamine (UK) – based on annual figures – not by campaign
29. “The short-term result of cutting
expenditure looks attractive for a short
while……but hides the considerable damage
being done to longer-term profitability“
Drawn from analysis of 880 case studies from the IPA Databank
30. Let’s look at a model of a total budget cut
The loss in share slashes profits over time
Year 2007 2008 2009 2010
Marketing Spend €7.9m 0 0 €7.9m
Market Share 7.1% 7.0% 6.3% 5.7%
Sales €317m €314m €282m €269m
Total Costs €278m €270m €251m €253m
Operating Profit €39m €44m €31m €16m
Source: IPA Datamine (UK)
31. Even with a more moderate 20% cut,
the profit is hit hard
Year 2007 2008 2009 2010
Marketing Spend €7.9m €6.3m €6.3m €7.9m
Sales €317m €314m €306m €313m
Total Costs €278m €276m €273m €281m
Operating Profit €39m €38m €33m €32m
Source: IPA Datamine (UK)
32. “Businesses that maintain aggressive
marketing programmes during a
recession, outperform companies that rely
more on cost cutting measures”
34. “Advertising fueled 15% of growth for the
G20 economies over the past decade, yet it
only accounted for 2% of economic spend”
35.
36. WFA study proved the positive impact of
advertising on global economy
Advertising
speeds up the
spread of
innovation
Advertising is a
multiplier of WFA Findings
economic
growth
Advertising is
essential for
competition
Source: World Federation of Advertisers (France)
37. Strong correlation between ad spend &
household consumption
Source: WFA, World Bank, Ad Barometer, WARC
Averages for the period 1991 - 2000
38. Our view
“The Government should introduce a
scheme where advertisers receive a tax
credit on incremental spend for one year”
There is a precedent for this.
A similar scheme was introduced in 2008 whereby companies received a tax credit of 25% on incremental R&D investment
39.
40. “There are only two
things in a business that
make money - innovation
and marketing. Everything
else is cost.”
Peter Drucker
Editor's Notes
The likely impact of this decline on the profitability of the brand over the three year period was then modelled assuming a fairly typical cost structure for a packaged goods brand. Other assumptions made were that category growth ceased for two years and resumed 5% growth in the third year; that marketing communications expenditure for the brand was restored in the third year; and that fixed costs for the brand rose with RPI across the downturn. The resulting profitability pattern echoed the conclusions of other researchers: that a short-term improvement was rapidly overtaken by a severe decline that became acute in the third year when the marketing budget was restored (source IPA Datamine doc)