Magazine Advertising in a Recession
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Magazine Advertising in a Recession . A summary of commercial behaviour in an economic downturn and brand and media recommendations for 2009. Why do advertisers cut back? . Because its easy and its quick. Lower than expected sales lead to lower profitability

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Magazine Advertising in a Recession

A summary of commercial behaviour in

an economic downturn and brand and

media recommendations for 2009

Why do advertisers cut back?

Because its easy and its quick

  • Lower than expected sales lead to lower profitability

  • Reduced capacity means less volume to trade

  • Competitors reduce spend so Share of Voice is maintained with less

  • Direct costs of unit production increase

  • Marketing spend is unspent, uncommitted and vulnerable

Market Dynamics at q1 2008

House prices and share portfolios continue decade of increases

Easy credit and joint incomes have created a marketplace of discretional spending - dining out, premium food ranges, fashion upgrades, multiple short breaks, technology, telephony

Relatively inexpensive household essentials have been and over supplied. Multiple ownership of brown and white goods, cars, and holidays

Market Conditions at q1 2009

Discretional spending cut back

Renewal of essentials delayed

Employment decreasing

Value of assets reduced

Market Conditions at q1 2009

Need for brands to remain strong and front of mind to secure revenue from smaller pool

[Price Waterhouse Coopers]

We believe cutting back marketing spend is not the answer

79% believe marketing is no longer dispensable.

It is key part of the business plan

Marketing is seen as more of a solution to help than a budget line to cut

Strategy first: We set our advertising strategy to take advantage of opportunities

in the downturn, then try to come up with a budget to achieve the strategy



Budget first: We reduce our budget, then come up with a strategy to do the most we can with that budget


Don’t know

[Advertising on the Edge. Economist Intelligence Unit Survey]

The importance of not cutting back

Because there are proven

negative impacts

on brand position and profitability if marketing expenditure is reduced during a downturn [Barwise,IPA,PIMS,Data2Decisions]

It’s a short-term fix

Brands that cut back emerge from the downturn weaker and less profitable

Long term profitability means maintaining Share of Voice above Share of Market

The importance of holding a long-term view

The benefits of advertising materialise in the longer term

50% achieved in year onewith the remaining 50% in years 2 to 4

The impact of advertising cuts may not be realised immediately. This may be misleading and harm the business in the long term

[Date2Decisions.[ROI defined as the incremental revenue generated from advertising per unit of spend]

The importance of not ‘going dark’

60% of brands which ‘go dark’ decline on at least one key brand metric

Two key brand relationship metrics

Usageand Image suffer

when brands “go dark” for six months or more

(See chart opposite)

There is also a danger that by falling silent a brands buzz scorewill decline, with the brand more likely to be judged


increase 11 22

decrease (24) (28)

The importance of ‘bonding’

There is a strong link between market share and brand-to-consumer bonding, an aggregate of brand-consumer metrics

Less investment in marketing communications leads to lower bonding and lower market share

[Millward Brown]

The importance of maintaining share of voice

Brands which cut their budget, relative to their competitors, have a higher chance of losing market share

When share of voice minus share of market is negative, a much higher percentage of brands lose market share

[IPA DataMine]

Because share of voice drives growth

Analysis of 880 case studies shows a correlation between share of voice and share of market gain or loss

As a rule of thumb, for every 10% points that share of voice exceeds share of market a brand can expect to gain one point of market share,

per annum

[IPA DataMine]

Evidence of brand value to advertisers

Coke’s market Cap including brand value

£120 billion

Coke’s market Cap not including brand value

£50 billion

[The Brand Gap]

The old dynamic

BrandRet ailerConsumer

The new paradigm

BrandRetailer Consumer

Direct supply, online shopping, alternative outlets, alternative

products, consumer product review forums, e-bay …

Brand strategies for 2009

Re-examine the role of advertising for your brand

Promote reasons for consumers to enter the market, before conveying your own brand attributes and benefits. Champion the categoryand be frontrunner in recovery

Re-ignite consumer satisfaction with the brand

Challenge consumer perceptions and behaviour toward the brand

Use insight to identify and promote the simple, but forgotten, pleasures associated with your brand

Focus on the personal connection through message and placement

Brand strategies for 2009

Reframe brand value

Convince consumers that a change of brand behaviour is not a compromise on quality

Find your brand’s compellingcentral truth and convey it. But consumers will shy away from brands which over claim

Communications Planning in 2009

Because despite the headlines its not all about

… well, not in the long term

Because value to consumers is not based on price alone

Bought goods …



NOT price related


on strength of brand





compromise of brand/price

Price related


on price alone


[Millward Brown, Brandz UK 2007]

Communications Planning in 2009

Select media which enhance the communication themes of your brand

and select an attentive and effectivemedium which delivers a breadth of proven ROI deliverables in sufficient size to provide the scale and economies for big brand media planning

Communications Planning in 2009

Does this support the brand?

Communications Planning in 2009

“Boosting search is key to our brands success”

Magazines lead in getting consumers searching

Which mediums influence you to start an online search?


Communications Planning in 2009

“I need more consumers to buy from my website”

Magazines excel at producing the traffic which converts to sales

% made purchase after conducting online search

Offline sources which drive qualified traffic to websites


Communications Planning in 2009

“I want buzz around my brands”

Magazines and web are key in reaching connectors

Magazines work well with web in reaching social networkers

Index based on Facebook & MySpace users


Communications Planning in 2009

“I want to reach positive communicators”

Magazines and web are key in getting to opinion formers

Influentials use magazines and web the most

Number of times medium ranked #1 among influentials across 60 categories


Communications Planning in 2009

“I have to improve opinions about my brand”

Magazines have a superior record in boosting brand favourability

Brand Favourability

Difference in exposed versus non-exposed consumers


Communications Planning in 2009

“I want get my brand mentioned”

Magazines and web are key in getting consumers talking

Magazines are strongest influence on personal recommendations

Percent saying magazines contributed to personal recommendations


Communications Planning in 2009

Driving purchase intent is critical for our success in 2009 Magazines rank #1 in lifting purchase intent

Media Impact on Purchase Intent

Difference in exposed versus non-exposed consumers

Cost per impact of Purchase Intent

Indexed to TV





Communications Planning in 2009

Most things we ever buy, we buy regularly. Every week 22 million shoppers are in-market for fmcg products and in a mind-set to listen to advertisers in those categories. Small nudges replace big shouts

Using NRS Readership Accumulation [to plan weekly print ratings] magazine advertisers can meet them there

Needs fulfilled (out of the market)


Week by week

Have not

Purchasing mode (in-market)


Advertising in 2009

For more information and usable charts please

contact [email protected]

020 3148 3639