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Recession? When Should Fayetteville Business Owners Stop Advertising?

Sep 20, 2019 6:40:00 AM / by Larry Julius

250x v2 Man With Crossed Fingers shutterstock_185477873After years of robust growth, there are some signals that point to an impending economic downturn. It is a part of the American business cycle. There have actually been more recessions in the United States than presidents (47 vs. 45).

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 Fayetteville small business owners sell fewer of their goods and services.

What a recession isn't is a time for Fayetteville business owners to stop advertising.

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 breakfast cereal may 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.”

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“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.”

In more modern times, a local small business owner tells a similar story.

Carolyn Barbour of Budget Rooter Advertises On Fayetteville RadioCarolyn and Tony Barbour are the owners of Budget Rooter, a Fayetteville based small business with a long list of commercial, residential, and industrial customers. “I can testify,” says Ms. Barbour, “our radio advertising has created lifetime customers for our company.

Mr. Barbour started Budget Rooter in 1998 as a part-time job. He worked nights and weekends out of the back of his Geo Storm. By 2000, word of mouth helped expand the business to a point where he could make it his full-time pursuit.

In 2007, the economy took a downturn, and many of Budget Rooter’s competitors began to fail. Not wishing to succumb to the same fate, the Barbours decided to expand their advertising efforts.

“We thought about using TV,” remembers Ms. Barbour, “but when we started asking other Fayetteville small business owners what type of advertising worked best for them, they all said radio.”

So, in 2007 the first Budget Rooter radio campaigns started airing on two Fayetteville radio stations. These commercials featured the company’s now-iconic slogan, “Don’t flush your budget on high repair bills.”

“For the first several months, our radio helped us keep our nose above water,” says Ms. Barbour. “I promise you. It was advertising on Fayetteville radio that kept us afloat.

As Ms. Barbour tells it, after being on radio consistently for nine months, the business started to take off. “In the deepest part of the downturn,” she recalls, “we were growing.”

Since 2007, Budget Rooter has not missed a single month of advertising on Fayetteville radio. “Our radio ads have been so successful,” says Ms. Barbour. “we have increased the number of stations we run commercials on from two to five.”

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 Fayetteville small business owners ability to survive or even thrive during a downturn.  Advertising can be a lifeline.

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Topics: small business owner, fayetteville small business owners, best way to advertise, recession, how to advertise, advertising

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