Amid the carnage of downturn budget-slashing, marketing and promotions are often the first casualties, but should they be? Belinda Smart asks the experts.
When a PR agency actively encourages its clients to do their own public relations, the natural order of the universe must surely be in question; but then again, it's not every day that economic pundits warn of recessionary global ills out-doing those of The Great Depression.
Last month Melbourne PR firm Handle Communications - whose fashion clients include niche womenswear brand Edith and Martin Fella Vintage - faced up to these extraordinary economic times by announcing it was adding another somewhat unusual arm to its businesses.
At $1000 a kit, the 'Handle your own PR' DIY PR package includes the option to buy qualified media lists from Handle, while another $500 will get you professional release writing services.
As counter-intuitive as the idea sounds, agency director Simone Handle says such kits are a welcome income stream for the agency, adding the time is ripe for budget services for small clients, who can't afford an ad campaign, but can't afford not to use PR.
"A good PR campaign will generate three to four times the return on investment. Where it results in good editorial, this is worth a lot, as an editor's opinion carries much more weight than an advertisement," she says.
Handle Communications is not the only business taking radical steps. At the big end of town Myer brazenly defied the belt-tightening mood by announcing, in the first week of February, that it planned to double its marketing budget, having successfully negotiated with partners to help underwrite a range of marketing initiatives.
Whether you're a small PR firm or a major department store, it seems the time has come to get to grips with recessionary marketing. But according to Serena Beirne, director of Sydney consultancy Australian Fashion Partners (AFP), few companies are showing such daring.
"In my honest opinion I don't believe that the majority of fashion organisations have made any smart improvements or refinements to tailor their advertising and promotional (A &P) activity to the wildly changed external environment. If they have made changes it has been to lower A & P spend and of course that sort of reaction only results in further reduction in revenues."
Before even broaching the subject of marketing spend, one of the first things businesses should do in a recession is clearly define their offer, Beirne says, citing Sydney shirting specialist Mr Rose and Culture Shock bridalwear as examples of brands who successfully embody this advice.
"Mr Rose have taken a market segment and invested the time to understand it fully from a fit, preferences and price point perspective. Their value proposition is clear and the market they are trying to capture really understands what owning a Mr Rose shirt means," she says. Meanwhile Culture Shock has identified a growing hole in bridalwear market, targeting more mature, style-savvy brides.
Anouk Darling, managing director of Sydney branding specialist The Moon Group, adds that a well defined offer is nothing without a targeted promotion strategy.
"Consumers look to brands and people they trust in times of uncertainty - family, friends and community. The importance of peer influence is a key consideration in marketing activities - online is cost efficient and if you can create a dialogue and social network with positive communication around your brand and products, this helps develop a relationship. A shopper is going to believe a consumer blog over an ad campaign."
Kate Vandermeer, brand manager at Melbourne based online look book site Stylehunter Australia (stylehunter.com), confirms the low-cost online arena has attracted unprecedented attention in recent months.
"Online is all about measurability, whereas media like TV, radio and billboards are harder to quantify," she says. Online ad spends also cost around a fifth of the price of more conventional advertising, while added capabilities like search engine marketing (SEM) allow for targeted direct marketing.
"For example at stylehunter.com, clients can rent out our database, or just a segment of it, so if you're a boutique owner who's about to open a store and you want to target women between the ages of 18 and 30, you can promote yourself to that very niche market."
AFP's Serena Beirne agrees that a bullseye approach pays dividends in tough times. And while it's tempting for those businesses whose core expertise lies in design rather than marketing to panic and slash promotional budgets, the better reaction is often to spend more, but wisely.
"It is worth investing in external assistance to make sure you are on the right track and have the best mix of all external communications tools including advertising, PR, promotions, direct sales, online marketing [...] and so on."
Finally, if your strategy does include PR, make sure you manage the output carefully, whether you are writing releases yourself or working with an agency, she says.
"Heaps of [editorial] placements do not necessarily equal heaps of sales. If it is not positively affecting your bottom line then you are doing something wrong."