Carat Urges Clients to Maintain 'Voice'


LOS ANGELES Because consumers behave differently during recessions, the good news is a chance to grow market share for those willing to learn from history and adapt tried-and-true practices to the media environment. Or so suggests a study by Aegis Group's Carat Insight, "Advertising Progression Through a Recession," released last week.

Though Carat predicts marketing outlays to be only 2 to 3 percent higher than 2007 (mostly due to the Olympics and election year), the manner of spending those dollars is crucial, it maintains. Citing multiple studies from earlier economic downturns, Carat suggests that clients at least maintain "share of voice" in their category.

The effect of cutting spending during hard times is an even rougher road ahead. "For the company to recapture pre-recession sales levels within a year requires spending 60 percent more money than the amount saved by cutting the ad budget in the first place," the report says.

Other lessons from history: Companies with multiple brands in a portfolio should maintain or increase spending on the strong brands and cut back on the weak rather than scale back across the board. Brands should constantly reevaluate their media mix, resist the temptation to cut prices, and, if necessary, use price promotions "strategically and judiciously."

But this recession will be different because of new media channels and the resultant boost to consumer empowerment. "Good news and bad spreads so fast there are dramatic turnarounds in attitude," said Ian Beavis, evp, executive client director at Carat, Santa Monica, Calif. "Unlike the last time, marketers don't have control. So they should engage every channel and measure consumer insight constantly." Citing Hunter S. Thompson, Beavis said, "This time around it's all about speed: 'Faster, faster, until the thrill of speed becomes the fear of death!'"