By John Ninness, CEO
In the mining and energy sector many industry product and service companies have recently felt the impacts of cutbacks to budgets for capital expenditure and operating costs. In many cases, providers are looking to other industries for revenue opportunities to maintain their businesses. Our anecdotal evidence across this sector is that their is a growing groundswell of people saying it’s all too tough to hold on and to advertise would simply be a waste in the current mining and energy sector environment. We examined some research out of the US during past recessions and found some interesting facts.
Fact One
McGraw-Hill Research analyzed 600 companies covering 16 different industries from 1980 through 1985. The results showed that business-to-business firms that maintained or increased their advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales of companies that were aggressive recession advertisers had risen 256% over those that didn’t keep up their advertising.
Fact Two
In analysis of the 1990-91 recession, Penton Research Services, Coopers & Lybrand, in conjunction with Business Science International, found that better performing businesses focused on a strong marketing program enabling them to solidify their customer base, take business away from less aggressive competitors, and position themselves for future growth during the recovery.
As one industry pundit put it “In the good times people want to advertise but in the bad times they have to.” We all recognise that as industries decline competition becomes more fierce.
As a small business with exposure to the minerals and energy sectors we will also increase our focus on offerings that are exceptional value for our advertisers and we will be looking to increase a range of advertising guarantees that ensure results for your investment. It’s the least we can do to support an industry who supported our products such as Queensland Mining & Energy Bulletin, Australasian Mining Review and Australasian Mine Safety Journal for many years when times were buoyant. We recognise that there is always a choice for our advertisers and we will endeavour to ensure that the decision to chose us is clear from our offer and our audience growth.
Jef l Richards once said “Advertising practitioners are interpreters. But unlike foreign language interpreters, adpeople must constantly learn new languages. They must understand the language of each new product, and speak the language of each new target audience.” In a market where pessimism exists don’t forget that the target audience still needs to hear from you, albeit in with a change of tone and structure to meet their needs in this rapidly changing environment.