Ad strategies scrutinized during downturn

All Super Bowl party guests in Columbia got a taste of Les Bourgeois Vineyards whether they bought a bottle or not. The Rocheport winemaker aired the first television commercial of its new ad campaign during the big game, kicking off an expanded marketing budget geared toward grabbing market share during the economic downturn.

“For 2009, it’s all about touching new people and letting them know about what we’ve got to offer, right here in their backyard,” Les Bourgeois Marketing Director Rachel Mills said. “There’s no better way to reach out than the Super Bowl.”

The commercial showed workers making wine and patrons drinking wine at the Blufftop Bistro. It displayed the slogan, “Stay warm this winter with Les Bourgeois.”

Although national advertisements for America’s biggest TV event of the year still carried multi-million-dollar price tags, overall advertising expenditures nationally have declined for the first time in years as consumers and businesses alike tighten their wallets. The declines, however, are not across the board. Television and Internet advertising expenditures continue to increase even as placement prices have dropped, but newspapers and radio are taking a hit at the national level.

In Columbia, media outlets are working more closely with businesses to craft marketing agreements, and businesses are seeing ad dollars stretch further than usual.

Some businesses, such as Les Bourgeois, are increasing budgets to steal market share while others are focusing their strategy and maintaining a consistent presence. Although local businesses vary in their marketing responses to the downturn, marketing and advertising agencies have noticed one constant: Clients are scrutinizing their ad budgets to make sure they’re using dollars effectively.

“When things were more footloose, marketing got sloppy,” Paula Elias, president of Axiom, said. “The economy should serve as a warning sign, but it shouldn’t dictate everything we do. It should make us stronger, smarter marketers.”

Clients are being more thoughtful about their advertising strategies, Elias said, and this often results in a shift from mass media to more targeted advertising.

“People are not focusing as much on the radio, TV and print spending of yesteryear,” she said. “They’re spending the same amount. It’s just shifting.”

According to TNS Media Intelligence, a company that measures U.S. ad spending, advertising dollars declined by 1.7 percent in the first three quarters of 2008 compared with the same nine months of 2007. Print and radio are the mediums that dragged that number down, with newspapers declining by 10 percent and radio by almost 9 percent, while TV and the Internet posted modest increases.

London-based ZenithOptimedia, a company that tracks global advertising expenditures, projects total U.S. advertising dollars to drop by 6.2 percent in 2009, by far the largest globally. Although the company also sees modest increases in TV spending and healthy increases in online spending, it projects large declines in print and radio advertising.

A buyer’s market

“There is no doubt that contracting advertising budgets are indicative of the slowing economy, and advertisers are looking for media outlets to work harder for a smaller percentage of the buy,” said Jack Miller, owner and president of True Media Services. “This coupled with the trend of marketing dollars migrating from traditional media to Internet, cable and more demographically targeted media is making it a challenge for mass media.”

As a result, media outlets have become “more aggressive in their pricing strategies,” according to Terry Woodruff, president of Woodruff Sweitzer.

“It is definitely a buyer’s market,” KMIZ Sales Director Mark Hotchkiss said. “Rates are certainly more affordable than last year with all of the political activity driving things.”

Although the Columbia market has not been nearly as affected as the national market, many businesses and media companies have noticed a slight decline in advertising prices as well as more flexibility demonstrated by media outlet sales representatives. And every business has at least paused to make sure its marketing budget is being used effectively, advertising executives said. They emphasize that there is no universal strategy – each business has its own response to the new economic conditions.

“Now is a hell of a time to pick up market share,” Brent Beshore, owner and CEO of Pure Marketing and Media, said. One of his company’s clients is Les Bourgeois, which has increased its advertising budget, focusing on TV ads and online media. According to Les Bourgeois’ marketing director, Pure Marketing is also producing a cinematic profile for the company to be used for its Web site, on-site promotions and new media pushes.

Pure Marketing itself has benefited from the downturn; revenue over the last three months has increased 40 percent, Beshore said. Clients have been attracted by its expertise in new media such as social networking and video branding, he said. And the business, which had only two employees at the beginning of 2008, has hired 10 more over the course of the year. Now the company has around 30 clients, Beshore said. But like any advertiser, he said all his clients are different in their approach to marketing, with some increasing advertising in certain mediums and decreasing in others.

Most advertising firms have noticed little change in their clients’ marketing budgets. It’s just not a good idea to reduce your presence in the marketplace, they noted. Businesses are loathe to reduce their advertising budgets at any time, and many advertisers say a more effective message is needed in a recession because potential customers are more careful about the purchases they make.

“Even in this tough economic environment, successful business people are doing what they always do but perhaps with a little more focus,” Mike Vangel, president of VANGEL, said. “They are taking a hard look at what they’ve done in the past to make sure it’s still working. Every recession, and I’ve seen a couple now, good businesspeople have the discipline to maintain their marketing focus.”

Carl Toalson, of Tint By Toalson, is one of the business owners who has tried to focus his spending rather than reduce it. Even though his window-tinting business has been affected by Columbia’s decline in new home construction, Toalson said he’s kept his ad dollars in television.

“I learned a long time ago you want to stay constant,” he said. “We try to budget the same amount every month.”

Guerilla marketing

But it’s also the little things business owners do that can make a difference. Toalson’s advertising consultant, Accountable MARKeting owner Mark Dahl, is a big proponent of free, innovative marketing.

“Sometimes it’s as simple as putting business cards on complementary businesses’ counters,” Dahl said. In fact, that’s usually the first thing Dahl suggests to his clients.

Toalson keeps up a rapport with managers of furniture stores around town and leaves a supply of business cards in their stores. Someone who buys a new piece of furniture might also want to have his or her house’s windows tinted to keep the new furniture from fading, Dahl said.

“It’s not something we could rely on 100 percent, but it’s gotten us jobs we wouldn’t have gotten in the past,” Toalson said. And why not, he said, it’s free.

Dahl said though the results aren’t quick and obvious from these so-called guerilla-marketing tactics, it’s a time investment that could yield results well into the future. Once the economy settles down, he said, customers need to have your business in mind when they do make their purchase. Maintaining a presence on traditional media is no longer enough, he said.

“The truth is, mass media is not what it was 15, 20 years ago,” Dahl said.

Terry Woodruff at Woodruff Sweitzer has seen his larger, national clients take this advice much more quickly than smaller companies. Interactive advertising is the most attractive marketing to consumers right now, he said. He has noticed that his clients haven’t had their normal advertising budget increase this year, but there is still an ongoing shift to new media.

“Most of our customers’ advertising has been shifting from traditional media with print probably taking the biggest hit,” he said.

Buchroeder’s Jewelers is buying very little print advertising in newspapers these days but is improving its Web site and shifting more of its advertising budget to new media, President Mills Menser said. The company’s bread and butter is engagement rings, and that generation is very active online, he added.

But Brian Steffens, executive director of the National Newspaper Association and associate professor at the MU School of Journalism, said that though larger newspaper chains and metros are hurting right now, there will always be a need for papers to advertise goods and services that everyone needs. Newspapers have 200 years of experience, he said, and the judge is still out on the Internet’s effectiveness in growing business and driving shoppers to physical stores.

“I feel that lots of stuff that goes to the Internet is going there because it’s sexy,” he said. “They’re just going because everyone is.”

In small markets, often the only truly local news outlet is the community paper, he said. And here in Columbia, people love their news.

“There is a media appetite here,” Steffens said. “There was an uproar when they mentioned cutting back the Missourian even though it’s a second paper and much smaller than the Tribune.”

Vicki Russell, associate publisher of the Columbia Daily Tribune, said that while certain advertising sectors have softened, the newspaper has not adjusted rates downward. The MU hiring freeze and slow business growth have had an impact on job-opening classifieds, and retail store closures such as Circuit City’s have also been noticeable, Russell said. But the newspaper is preparing to launch a new online product that will have a strong free advertising component for every business in Boone County, Russell said.

“When times get tough, you have to look for ways to help local business,” she said.

A healthy mix of media

Even Woodruff, whose company often stresses the advantages of online marketing, said mass media advertising should rebound as the economy corrects. But he said that clients who have shifted more of their budgets to the Internet and see results could keep their dollars there.

“Traditional media is still needed to launch new products and services,” Woodruff said. “You still need to reach the masses.”

Vangel also said that good advertising will always rely on a healthy mix of media.

“I don’t see any radical shifts coming,” he said. “Are people using the Web more? Yes. But is there a Holy Grail of advertising? I don’t think so.”

Savvy companies are always tweaking their message and placement to find what works, Vangel said, economic downturn or not.

Lili Vianello, president of Visionworks Marketing & Communications, said the main advice she’s giving clients right now is “don’t get caught up in the hype,” but don’t be reckless either.

“Keep your head and manage expectations – double digit increases are a few years off,” she said. “It’s fine to think twice about not making an expenditure, but don’t be ruled by fear.”