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Agrimarketing : July August 2008
July/August 2008 ¦ AgriMarketing 29 F or many sectors of the ag econo- my, it is a great time to be in agri- marketing, with crop suppliers, crop producers and landowners all experiencing thriving financial health. However, for those ag sectors not producing the best economic returns, such as livestock suppliers or the recent heavily flooded areas of the Midwest, American Business Media (ABM) has compiled research into a valuable presentation tool titled, “The Importance and Value of B2B Advertising During Times of Eco- nomic Uncertainty.” ABM recognizes that some mar- keters, including those in the agri space, are concerned about investing in advertising during today’s current period of economic uncertainty. To address these concerns, this presenta- tion summarizes the wealth of data that has been accumulated over time, from studies conducted by various companies, including BtoB maga- zine (2008), the ABM Yankelovich/ Harris Study (2001), Pennsylvania State University’s ISBM Report (2002) and more. DON’T LET YOUR MESSAGE GET LOST IN THE FIELD BtoB magazine’s major study, conduct- ed in January 2008 and February 2008, surveyed 684 business-to-busi- ness marketers and discovered that the importance of advertising during times of economic uncertainty has clearly resonated with marketers. Regardless of fears about a U.S. reces- sion this year, over 70% of the mar- keters surveyed indicated that they would either keep the same or increase their marketing budgets in 2008. 1 Futhermore, the study found that for those marketers who plan to increase spending in 2008, business- to-business’s three key media plat- forms — print, face-to-face and online — will each benefit. The online category will see the greatest increase, proving the significant growth in digital media usage in the business-to-business space. These findings should especially reverber- ate with farmers and ranchers, who are spending increasingly more time with the Internet as a source of infor- mation for researching new products and services. Thus, it is encouraged for agri-marketers to revise their mar- keting budgets to ensure that an inte- grated business media plan reaches farmers and ranchers. WHEN IN DROUGHT, ADVERTISE Advertising during an economic drought is an opportunity, not a dis- advantage. It is important for agri- marketers, especially those in weak sectors, to adapt their advertising plans to the ever-changing, uncertain economic landscape by taking a more aggressive approach. Research proves that advertising during a recession gives companies an advan- tage over competitors, boosts sales and market share, favorably reposi- tions a product or service in the mind of the target audience, presents stabil- ity in a shaky business environment and gives advertisers the opportunity to dominate the media. As the 2001 ABM Yankelovich/ Harris Study found, advertising in a down economy creates a competitive advantage, with nearly all executives (99%) indicating that it is critical to remain aware of new products and services in their industry and to con- tinue to invest for the future. 2 Pennsylvania State University’s Institute for the Study of Business Markets (ISBM) adopted a similar motto in its 2002 ISBM Report, stating that “the greater the proactive mar- keting of a firm during a recession, the better its a) market performance and b) business performance.” Dur- ing a weak economy, “risk taking may be necessary for survival and growth” and those companies that increased their marketing send a “reassuring signal of confidence to concerned customers about their staying power and provide an incen- tive for customers to switch from brands/firms that they perceive as weak.” 3 And the risk is worth taking: according to McGraw-Hill Research’s Laboratory of Advertis- ing Performance (LAP) , those firms which maintained or increased their advertising expenditures, “averaged significantly higher sales growth” during and for the three years follow- ing the recession, compared to those which eliminated or decreased advertising. The study, conducted in 1985, surveyed over 600 business-to- business firms. 4 So what does this research mean for agri-marketers? The answer is definitive: when times are good, you should advertise; when times are bad, you must adver- tise. Ag media works 365 days a year, even during troubled economic times. Corn and soybean prices may be skyrocketing and livestock is suf- fering, but it is still crucial to stay ahead of the game so your brand comes out on top. Ultimately, the companies that can continue building awareness of their brands and make certain their message is not lost, espe- cially in the midst of a recession, will reap the greatest rewards. AM 1. BtoB online survey of 684 business-to- business marketers, January/February 2008. 2. Yankelovich/Harris Study, 2001. 3. Pennsylvania State University, ISBM Report: Raji Sriniva, Gary Lilien, and Arvind Rangaswamy, 2002. 4. McGraw-Hill Research Laboratory of Advertising Performance (LAP), 1985. ADVERTISING: KEY TO AG’S GREATEST ECONOMIC HARVEST by Jenna Lisanti, American Business Media
CAMA 2008 Canada