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How a recession affects advertising and social media

March 17th, 2009

Recession.  Wikipedia defines it as “…a general slowdown in economic activity in a country over a sustained period of time, or a business cycle contraction.“  Yes – we’re definitely smack in the middle of a recession. 

In the profession that I am in – marketing and media – we see the effects squarely hitting the budgets we use to promote and market our products.  Personally, my media budget of 2009 looks vastly different than it did just one year ago.  That’s not to say we are de-emphasizing the importance of advertising within our marketing mix, but we are definitely looking to make every dollar we spend work harder for us during this time.  In addition we are looking at ways we can integrate ‘human’ capitol into our plan to augment the $$ we are actually spending. 

What’s interesting about this is that we are not alone in continuing to maintain, if not increase, our focus on Social Media during this downturn.  According to Forrester Research through findings in a recent survey, it was determined that “the use of social media as a marketing tool is on the rise” (from ReadWriteWeb).  In fact the report continues to say that over 50% of the marketers surveyed indicated that they will actually be increasing the spend on social media and social tools in the coming months (diagram below from ReadWriteWeb).

For those companies that can afford to ‘spend their way through the recession’ the opportunities that come with it are interesting.  How you ask?  With so many companies reacting to the downturn by sharply reducing money spent on advertising from their marketing budgets, rates will become cheaper as a result of the decreased demand. For those willing to continue to spend in this environment, they will be able to advertise without having their message diluted by competitors – for a significantly lower cost.  The moral I pull from these reports is to be smart where you cut your budgets, because the opportunity to break through the clutter and advertise your product may not be as costly as you think.

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