Advertising Is Good For You

Cut your ad budget at your own risk

Advertising and marketing budgets are one of the first things cut during troubled times.

In fact, it should be just the opposite.

In a recession like this one, where so many businesses are on the brink, you'd think it would be a no-brainer that NOW is the time to increase promotional efforts to at least keep, if not increase, your customers.

A new study from Ad-ology Research provides another compelling reason not to cut ad and marketing spending.

The study, "Advertising's Impact in a Soft Economy," found that almost half of Americans believe that lack of advertising by a retail store, bank or auto dealership during a recession means the business must be struggling.

CLICK HERE for more results from the study as well as a link to where you can purchase the entire Ad-ology study.

If GM drives off a cliff, it's taking a lot of advertising people with it

Advertising has the lousy distinction of being one of the first industries to tank when the economy goes bad. And it's one of the last industries to recover when the economy improves. Small wonder then that almost all the advertising agency people I know got laid off at least once before they turned 30.

Right now, advertising people are soiling themselves with fear. And we know it's only going to get worse. Especially now that the American auto industry is running on fumes.

An article in Advertising Age reports how much of an impact Detroit's breakdown could have on the advertising industry:

"The world's top four agency companies -- Omnicom Group, WPP Group, Interpublic Group of Cos. and Publicis Groupe -- count on Detroit's Big Three for as much as 6% of revenue."

The auto industry accounts for:

5.9% of total U.S. network TV spending

2.8% of total U.S. magazine ad spending

8.0% of total spending in Sports Illustrated

9.2% of total spending on Fox network TV

2.5% of total U.S. cable-TV ad spending

6.8% of ad spending on ESPN

How's that advertising thing working out for you, Senator?

The brain behind J-Walk Blog created a graph that charts the advertising costs and votes of the major players in yesterday's Iowa caucus. (Click graph to enlarge.)

The diagonal line is the linear best-fit line. The two variables have a correlation coefficient of 0.779. (I have no idea what that means but it seems important.)

Romney paid the most per vote: $238. Obama and Clinton both spent about $103 per vote. The biggest bargains were for Edwards ($48/vote) and Huckabee ($35/vote).

Some progress in the battle against cigarette smoking

According to the Federal Trade Commission, cigarette makers' advertising and marketing spending dropped from a record high of $15.15 billion in 2003 to $14.15 billion in 2004 and $13.1 billion in 2005.

Of course, despite the drop, cigarette makers' advertising and marketing spending is still twice what it was in 1998; that year, spending was $6.7 billion.

According to the LA Times:

Most of the tobacco companies' promotional spending is in the form of price discounts to cigarette retailers and wholesalers to reduce the price of cigarettes to consumers, the FTC report said, while advertising in newspapers, magazines and on billboards has dropped significantly in recent years.

According to Outsell, Inc.'s second annual report on ad spending, U.S. advertisers are expected to increase the amount they spend on search engine advertising by 39% in 2007.

Source: Media Post's Center for Media Research

Top Five Superbowl Advertisers 1987 -2006

1. Anheuser Busch
2. Pepsico
3. General Motors
4. Time Warner
5. Walt Disney

Source: TNS Media Intelligence, January 2007

20 years of Superbowls have yielded 1,400 TV commercials and $1.72 billion.*

 

* Media Post's Center for Media Research

Why pay for Lindsay Lohan if you're just going to disguise her?

Italian fashion house MiuMiu signed Lindsay Lohan on as its new celebrity model. Presumably, MiuMiu paid Lindsay Lohan a decent chunk of change, too. But when it came time to shoot the ads, the actress/sometime singer was made up to be unrecognizable.

Seems like a big waste of money to me.

Actually, I never thought Lindsay Lohan was a good choice to begin with. Her biggest fans tend to be tweens. I doubt deep-pocketed 18 - 25 year-old trendsetters consider her a role model.

Source: B.Y.O.B.

Russian vodka maker Imperia paid $3 million for the domain vodka.com as part of its expansion into the US market.

Source: Luxury Launches

Pharmaceutical marketers increased ad spending by 9% in 2006 over the previous year.

The biggest spender was the maker of prescription sleep aid Lunesta which shelled out 78% more in '06 than in '05.

Cholesterol drug Crestor increased its spending by 15% for the same period.

Viagra saw an increase of 15%, too. (Stop that snickering.)

Source: AdWeek