As tariffs between the USA and Canada escalate, we’re seeing ripples across industries, forcing brands to reconsider their strategies. While it’s understandable to want to cut back in times of economic uncertainty, doing so—particularly in advertising—can be a costly mistake.
Cutting ad spend during times of economic uncertainty has proven time and time again to be the wrong move. When faced with downturns, brands that maintain or even increase their advertising budget often come out on top. Take, for instance, Procter & Gamble during the COVID-19 pandemic. While others reduced their ad spend, P&G maintained their advertising efforts and saw a 4% revenue growth in Q2 2020. In contrast, Coca-Cola slashed its budget and suffered a 28% revenue hit. History has shown that brands that invest in advertising during economic slowdowns not only recover faster but also capture more market share when stability returns.
We’ve seen this same resilience in action with McCain. In the face of rising competition from private labels and discount retailers, McCain chose to invest in brand-building and emotional connection. Despite being the higher-priced brand, McCain experienced a 47% decrease in price elasticity and a 44% increase in base sales over an eight-year period.
Going dark on advertising doesn’t just impact sales—it leads to significant declines in brand awareness that are both difficult and expensive to recover. Research shows that during the pandemic, the hotel industry reduced marketing expenditures by an average of 27% from 2019 to 2020, resulting in an 18% decline in both brand familiarity and consideration among consumers. Rebuilding lost awareness requires greater investment over time, turning short-term budget cuts into a long-term setback.
Today, with tariffs and rising costs pushing prices higher, building trust and emotional connections with consumers is more important than ever. Consumers are making tough choices about where to spend their money, and brands that stay engaged and visible will be the ones that maintain loyalty.
At Hotspex Media, we're here to guide you through uncertain times with hands-on, senior-level support. With our cutting-edge dashboards and insights, our media strategies empower you to punch above your weight, delivering efficient and effective results. We’re dedicated to ensuring your media works as hard as you do.
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