Big Companies Cut Back on Everything, Except Advertising
Statistics for big companies throughout 2013 indicated that businesses, in general, limited spending due to money strains. However, one item larger corporations chose not to slack on was their funding for advertisements. An sought to explain this choice.
After the economic breakdown of 2008, companies, both big and small, have struggled to regain the trust of the consumers. Frequently, ads are their chosen method of doing so; it is by far the easiest means of communication between the company and the buyer. However, the article did note that a statement by Corebrands founder and Chairman Jim Gregory indicated that there is still a long journey ahead in terms of regaining trust. While consumers are slowly beginning to spend money and put their faith back in the economy, businesses cannot rely solely on marketing to get the word out on their successes. According to the article, reaching out with employment needs indicates a healthy business with booming profit. In essence, if the company has spare money to hire further employees, consumers will interpret this as a solid indicator that things are going well.
Money must also be invested in the company to keep things stable. Generally speaking, companies have found investing in advertising far cheaper and more productive than engaging in research and development. However, this puts a lot of pressure on the ads being issued; they must hold a strong emotional component to hook customers on products that may not have undergone much development.
Technology is a likely avenue for reinvestment as well. Technological sources can provide some of the development at a cheaper cost than more traditional research and development paths. It can also provide statistics that allow the company to supply the perfect amount of product to meet the current level of demand; therefore, no money is wasted by over supplying or failing to produce products that could’ve been sold. Finally, technology can also be a cheap means of advertising, if marketing methods are applied affectively and appropriately.