Greetings!
I never thought I'd see the sale of one newspaper as an indication that
the recovery may be coming, but with many metro dailies on the market
and no buyers stepping up to the plate, the fact that an investor group
has agreed to purchase the SD Union is quite newsworthy. And, the
Tucson Citizen may survive.
The following article is a good sales piece to use with advertisers. This is the time for your advertisers to make huge steps forward vis a vis their competitors.
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Advertising made simple, investing in a bad economy
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When the economy heads south 75% of U.S. companies respond by cutting back, hunkering down, and trying to "tough out" the tough times. Advertising is the first expense that gets eliminated.
There are two other advantages to aggressively advertising during economic recessions.
1) Your "share of voice" becomes multiplied as the advertising noise reduces.
2) Your "share of mind" is often uncontested for months at a time. During these times your more timid competitors will fall behind and likely never catch up.
Take a look at this graphic.
Itīs a summary of the McGraw-Hill Research study of the 1981-82 economic recession in the U.S. The study analyzed 600 companies covering 16 different SIC industries. Year one on this graph is 1980. Year six is 1985.
Youīll note that the aggressively competitive companies represented by the black bar had only a slight edge over their competitors in the years leading up to the recession. Their sales growth was in the middle of the pack as the recession hit. But while their competitors cut back in year one, or year two, or both, they continued to invest in getting their message out.
These firms grew nicely during the recession, but the real news happened in the two years following the end of the economic downturn.
Two years into the recovery, the competitors who did cut back had all stalled out at levels the aggressive companies had blown past during the recession. By the end of 1985 the companies that didnīt cut back had grown a whopping 256%.
During the recessionary period 1989-1991 Kraft salad dressings, Jiff peanut butter, Bud Lite, Coors Lite, Pizza Hut, and Taco bell were in the aggressive group which increased advertising expenditures. Jell-O, Crisco, Hellmanīs, Green Giant, McDonalds, and Doritos cut back on advertising during this period. Predictably the first group had showed growth during the recession ranging from 15% to 70%. The second groupīs sales dropped 26% to 64%
During our last economic downturn, while aggressive marketers such as Proctor and Gamble took advantage of reduced media rates to expand their advertising program, K-Mart decided to decrease advertising during September and October, 2001.
The result? K-Mart sales dropped a resounding 5% during October. By late fall the company had lost far more in sales than it had saved in marketing expense.
At least a dozen other studies ranging from 1923 through 1991 show nearly identical results. Meldrum & Fewsmith showed in a series of six studies that, for all post World War II recessions, those firms that kept advertising aggressively increased profits as well as gross sales during the recession.
It's important to remember that during a recession consumers donīt stop buying. They become more selective. They look much harder for "value" in their purchases. They are going to buy from someone. They're likely to buy from businesses that they know and like.
Make sure they know you.
The more visible you are, the more confidant your customers and prospects become. The more they are reminded of your legitimacy and staying power, the more they'll be inclined to believe you'll be there for them tomorrow.
Remember too that during any period of economic downturn your best customers become someone elseīs best prospects. When you stop inviting them to do business with you, a more aggressive competitor may become much more attractive.
Excerpt from "Advertising Made Simple Investing in a Bad Economy" By Chuck McKay From allbusiness.com.
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San Diego Union sold to investment group |
Just one day after the closing of the Seattle Post-Intelligencer dramatized the industry's misery, signs of hope have emerged in the apparent rescue of another beleaguered paper. The San Diego Union-Tribune,
which has struggled amid the plunging real estate market and generally
sour Southern California economy, has been sold to an investment group
that "specializes in acquiring businesses facing complex operational
challenges in declining or transitioning markets." The price wasn't
disclosed.
Read more...
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Eleventh-hour buyers appear for Tucson Citizen, paper publishing 'day-to-day'
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It ain't over yet for the Tucson Citizen.
The struggling Arizona paper was set to close on Saturday - and had
even prepared a farewell edition - but now two prospective buyers have
emerged and Gannett Co. has announced that the Citizen will continue to publish on a "day-to-day basis" until negotiations are completed.
Talks are in progress with two "very interested buyers," according
to Robert Dickey, president of U.S. Community Publishing for Gannett
Co. in a memo to staffers. Reporter Renee Horton dug up the name of one
likely party: Santa Monica Media Corp., a "blank check company" that
exists solely to perform mergers and acquisitions.
Read more...
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Mirror for sale, maybe
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 Anyone want a mirror? |
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Cheers,
Craig McMullin
AFCP
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Your Ad Here!
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Visit Our Sponsor
Put your logo and ad here for only $20 per issue. We'll hot link it to your designated web page so readers can easily find you.
Or, give us an article to run as the bottom article on a future issue of Cheers for only $75!
Just contact Craig at craig@afcp.org for more information.
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