Don’t cut your marketing

It’s hard in this recession, deciding what you have to cut. But don’t touch your marketing. If anything, increase it. One reason is that in tough times, people do revert to brands they know and trust.

Brand valuation consultancy Brand Finance has just published this year’s top 500 leading global brands.

It says since January, all sectors have been hit and the drop in brand value across the Global 500 for the year is $980 billion or 24%, declining to $3172 billion.

Woolworths is Australia’s most valuable brand with a value of $6.3 billion, gaining 5% and rising more than 50 places to 143rd on the list.

Its secret? Refreshing its branding, refurbishing stores and strong advertising campaigns. Globally, the top 10 retail brands were the least affected of all sectors.

Banking has been superseded by telecommunications as the most valuable sector top 10. And incredibly, Telstra has moved ahead of NAB, which was Australia’s most valuable brand in 2008. That said, Telstra’s brand value is 8% lower than the previous year. Qantas has taken an even bigger hit, down 28% on last year.

But the lesson from all this, says David Haigh, CEO of Brand Finance, is that strong branding is the key to negotiating the downturn, since customers revert to brands they trust.

 “Wal-mart, McDonald’s and HSBC have repositioned themselves in tough markets and are reaping the rewards. Marketing departments must make the case to their finance directors to win the cash needed to keep their brand alive; cutting costs may not just be a blinkered short-term solution, it may be fatal in the long-term.”

And the message for smaller companies? It’s even more important to keep up your marketing efforts and spend. In these nervous times, customers may well move back to what they know.

So you need to keep reassuring customers with a visible presence, and also seek new customers to replace those who defect to larger companies.