3 Reasons to Spend More on Marketing in 2021

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As Knute Rockne said, “When the going gets tough, the tough get going.”

They also get marketing. You might think, during times like these, you should cut back on your marketing budget. You may have already done that this year. In fact, you should be doing just the opposite.

So how much should you be spending on marketing? The internet has as many numbers as it has “expert” opinions, but in an average year, a nice round number is 10% of gross revenue. As we know, however, this hasn’t been an average year — nor is the next one likely to be.

Rockne also said, “Show me a good and gracious loser, and I’ll show you a failure,” and you certainly don’t want to be one of those. So here are “3 Reasons to Spend More on Marketing in 2021.”

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1) Excess Share of Voice

This is a fancy way of saying, if you talk louder than the next guy, you’ll get bigger than him, too. Your share of voice is the proportion of advertising you contribute to your category of business. If it exceeds your market share, you’ve got Excess Share of Voice (ESOV).

Simply stated, if you’ve got 20% market share but 30% share of voice, you’ve got an ESOV of +10. Why’s that important? In almost every instance, a brand with positive ESOV will grow its market share until it matches its share of voice.

So this is the perfect time to increase your marketing spending to capitalize on a field left vacant by your more timid opponents.

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2) History teaches us to increase marketing

An old axiom says, “When times are good, you should advertise, but when times are bad, you must advertise.” You must, if you want to grow sales rather than lose them.

In the 1981-82 recession, companies that maintained or increased their ad spend grew their sales by 256% over three years, compared to those who eliminated or decreased advertising.

Want a more recent example? In the 1990-91 recession, Taco Bell and Pizza Hut boosted their advertising while McDonald’s cut theirs. McDonald’s sales dipped by 28%, while Pizza Hut’s grew by 61% and Taco Bell’s by 40%.

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3) Branding is a long-term game

While advertising works on an immediate level to drive short-term sales, it also builds your brand over a period of years. So marketing is definitely a game in which you want to “go long.”

During a crisis like a pandemic or economic downturn, your brand needs the visibility marketing provides. When the going gets tough, you need to spend even more on marketing to:

  • Increase trust
  • Create brand loyalty
  • Keep you top of mind with customers and prospects
  • Position you to serve customers now and later

In short, marketing is an investment — one that you need even more in thin times than flush. Consumers still need to buy, and if you don’t market to them, your competitors will.

As Knute Rockne would say, “All the world loves a winner and has no time for a loser.”

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