Advertise In Vegas Advertise In Vegas

Recession? Why Las Vegas Business Owners Should Continue Advertising

Sep 25, 2019 5:27:44 PM / by Larry Julius

Advertise In Las Vegas During RecessionIt's the cycle of American business. During this country's history there have been more recessions than presidents, 47 vs. 45.  Unfortunately, some economists believe number 48 could start any day now.  

The textbook definition of a recession is a period of declining economic performance across an entire economy, frequently measured as two consecutive quarters. In other words: it's a time when most Las Vegas small business owners sell fewer of their goods and services.

There is one thing a recession is not.  It is not a time for local business owners to stop advertising.

One of the great marketing minds of all time, Henry Ford, once said, "The man who stops advertising to save money is like the man who stops the clock to save time."

There are many examples of companies that have proven Mr. Ford's observation to be accurate. The bowl of cereal you had this morning could be one example.

The New Yorker magazine financial columnist James Surowiecki writes, “In the late nineteen-twenties, two companies—Kellogg and Post—dominated the market for packaged cereal. It was still a relatively new market: ready-to-eat cereal had been around for decades, but Americans didn’t see it as a real alternative to oatmeal or cream of wheat until the twenties.”

New call-to-action

“So, when the Depression hit, no one knew what would happen to consumer demand. Post did the predictable thing: it reined in expenses and cut back on advertising. But Kellogg doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. (Snap, Crackle, and Pop first appeared in the thirties.)

“By 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty percent, and it had become what it remains today: the industry’s dominant player.”

What you ate for lunch could also be an example of a company that thrived by advertising its way through a recession.

In a recent article in Forbes, media consultant Brad Adgate explains that "In the 1990-91 recession, Pizza Hut and Taco Bell took advantage of McDonald’s decision to drop its advertising and promotion budget. As a result, Pizza Hut increased sales by 61%, Taco Bell sales grew by 40% and McDonald’s sales declined by 28%."

Many Las Vegas business owners, unfortunately, do not have the financial resources of Kellogg's or Pizza Hut. So, it is inevitable that some advertising budgets may need to be trimmed or re-configured. For those companies, advertising on Las Vegas radio makes the best sense for several reasons.

According to Nielsen, one of the most potent components of a marketing campaign, as it relates to sales, is reach. This is the number of consumers who actually are exposed to an advertiser's message.

Reach, it turns out, is more powerful than targeting, branding, context, or recency.

Advertise in Las Vegas Critical ElementsLas Vegas radio, provides, by far, the largest reach of any local advertising medium.  It reaches significantly more consumers than local TV, local newspaper, social media platforms like Facebook, or streaming audio sites like Pandora and Spotify.

Advertise In Las Vegas Reach Among Adult Consumers

More importantly, Radio's omnipresence is true among consumers of all ages, including generations X, Y, and Z; Millennials and Boomers. Everyone.

Advertise In Las Vegas Media Reach By Age Group

The other reason radio should play a primary role is during an economic downturn is the mediums well-documented return-on-investment (ROI).

Over the past few years, Nielsen has conducted over 20 studies to determine what type of ROI a business can expect from radio advertising.  Although the results varied by industry, the average company generated $100 in sales for ever $10 invested. 

The chart below shows the range of returns from each study.

Advertising In Las Vegas Return On Investment

AdAge, a trade magazine for advertising professionals, calls these types of return "eye-popping".  The magazine goes on to say radio's ROI is superior to commercials on TV, online, and social media.

Local business owners have always known that they can expect impressive returns-on-investment when advertising on Las Vegas radio stations.

Advertise In Las Vegas ROIIf you were one of the 1,502,898 adult consumers who tuned-in to a Las Vegas radio station last week, then you, no doubt, heard Aaron Taylor. You know, 'The Real Estate Guy'.

"Radio, by far, is my biggest source of advertising," says Mr. Taylor. "We have sold more homes and made more money since I started advertising on the radio than I have at any other time before then."

After the first month of radio advertising, Mr. Taylor did not see any results. "I knew it would take time to work," he says. "So, I committed to myself to stick with it for a year."

During the second month, Mr. Taylor received his first phone call from his commercial. The third month a few more came in. "During the fourth month," he says, "we closed a sale. Then the radio advertising really gained momentum."

"When I saw how successful how our radio commercial was doing, I added a third station, then a fourth, then a fifth, and so on."

"After our first year on the radio," says Mr. Taylor, "we had gone from selling 50 homes a year to 300." By any measure, a home run."

Today, out of 16,000 agents in the Las Vegas area, The Real Estate guy ranks sixth with home sales exceeding $80,000,000 per year.

Mr. Taylor continues to advertise on Las Vegas radio stations. "We are on 24 different radio stations, 52 weeks every year. "I know that every $10.00 I invest in radio advertising will pay back $50.00 in sales," he says.

Advertising During Downturns Has Extraordinary Value

A study published by WARC determined that increasing advertising during a downturn has extraordinary long term value for any business.

According to the study, "those advertisers who increase spending, whether modestly or aggressively, achieve greater market share gains than those who cut their advertising investment. This, in turn, puts them in a better position to increase profits after the recession.

One can hope that the next recession will be slight. But hope will not guarantee a Las Vegas small business owner's ability to survive or even thrive during a downturn.  Advertising can be a lifeline.

More Advertising Advice For Las Vegas Small Business Owners

New call-to-action

Topics: reach, return on investment, roi, las vegas radio stations, advertise in las vegas, best way to advertise in las vegas, advice, retail, recession

Subscribe To Advice

Advertise On Las Vegas Radio

Recent Posts

Our Social Media