Reducing brand promotion during hard times can be fatal

The usual practice by companies of cutting down on promotional and advertising spending during economic downturns will have an immediate and lasting adverse impact on the brand instead of improving company margins. Consumers will almost naturally forget the brand or have a negative perception of the brand that will ultimately be fatal to the sustainability of the brand and the company.

These observations were raised by Chris Thomas, chairman and chief executive officer of global advertising leader BBDO and Proximity Asia, and BBDO’s local partner, David Guerrero, chairman of BBDO Guerrero.

Thomas said the old view that advertising is just producing copies for the television, radio or the broadsheets is now passé as there are numerous options available to promote and push the brand and not sacrifice its visibility to consumers.

For one, advertising can be in the form of SMS or short messaging service; making 30-seconders for the Internet; blogging; events and even crisp two or three liners on billboards or wide screens on the roads that will send overt and covert messages to consumers, he said.

When Guerrero put up BBDO in the Philippines 10 years ago, the country was suffering from a financial crunch that affected most economies in the world. “But I put up the company because I was convinced that brands should be pushed even more aggressively in hard times so that consumers will continue patronizing their products/services even if they have to cut down on spending on certain items,” Guerrero said.

For the first companies that believed in his message—namely Pepsi, Fedex, Pizza Hut, Fonterra, Johnson & Johnson, Procter & Gamble and Citibank—they just cut back expenses in some items but pushed their promotions even harder. “They survived the crisis and grew even more,” Guerrero said.

Exactly 10 years later, Guerrero is pushing the same message across to Filipino companies: “Do not cut on promotional spending; use ingenious and creative ways to push your products in the market and do not believe that cutting prices will cause consumers to buy your product. Price is not their only consideration,” he said.

BBDO Guerrero did the “hate late” campaign for Pizza Hut and is now a common campaign for most fast food chains in the country. It also did a campaign recently for Fonterra about the safety of New Zealand-sourced milk amid the scare about melamine in milk coming from China.

Thomas said advertising messages have evolved from “intrusive” (as in the impact of television, radio and newspaper campaigns) to invitational and finally to involvement, by engaging people to be part of the campaign.

“Time will come when Filipino consumers will realize that they have the power to influence advertising campaigns considering they have all the technology available—cameras on cell phones and audio or video files transferrable from and to the You Tube,” Thomas said citing the current American presidential campaign where Obama or McCain supporters are using the You Tube for purposes of getting voting sampling and immediate reaction via blogging.

“Who knows we might even see this phenomenon in the Philippines in the 2010 elections,” Guerrero said.